On August 12, Guangdong Songfa Ceramics (*ST Songfa) released an “Announcement on Using Raised Funds to Increase Capital in Its Wholly-owned Subsidiary and the Wholly-owned Subsidiary’s Capital Increase in Its Wholly-owned Grand Subsidiary for the Implementation of Fund-raising Investment Projects”.
The announcement disclosed that *ST Songfa plans to use the raised funds to increase the capital of its wholly-owned subsidiary Hengli Heavy Industries by RMB 3.932 billion (approximately US$548 million), of which RMB 3.9 billion (approximately US$544 million) will be paid-in registered capital and RMB 32.05 million (approximately US$4.4678 million) will be included in capital reserves. Furthermore, *ST Songfa plans to use the raised funds through its wholly-owned subsidiary Hengli Heavy Industries to increase the capital of its wholly-owned subsidiary Hengli Shipbuilding by RMB 3.5 billion (approximately US$488 million) to implement the raised funds investment projects. This matter still requires approval by the company’s shareholders’ meeting.
According to the announcement, the raised funds will be used for the construction of the target company’s fundraising investment projects, specifically:
This capital increase will be carried out in the form of a one-time or phased capital increase. After the capital increase is completed, the registered capital of Hengli Heavy Industries will be changed from RMB 300,000.00 million to RMB 690,000.00 million, and it will still be a wholly-owned subsidiary of *ST Songfa; the registered capital of Hengli Shipbuilding will be changed from RMB 650,000.00 million to RMB 1,000,000.00 million, and it will still be a wholly-owned subsidiary of *ST Songfa.