Yangzijiang Financial pumps 1.02 billion yuan in lithium battery producer Ningbo Shanshan’s restructuring

[SINGAPORE] Investment management company Yangzijiang Financial and two of its strategic investors have entered into an agreement to lead the restructuring of Chinese lithium battery producer Ningbo Shanshan. 

In a bourse filing on Wednesday (Oct 1), Yangzijiang Financial said the consortium – comprising its wholly owned subsidiary Jiangsu New Yangzi Commerce & Trading, as well as strategic investors Xiamen TCL Industrial Investment and China Orient Asset Management – will obtain effective voting rights of about 23.4 per cent in Shanshan.

These voting rights will be entrusted to Yangzijiang Financial upon the completion of Shanshan’s restructuring.

As part of the deal, Yangzijiang Financial and the two strategic investors have formed an investment holding platform to acquire 223.3 million shares of Shanshan at 11.44 yuan per share. This translates to 9.9 per cent of Shanshan’s total share capital. 

Yangzijiang Financial will contribute 1.02 billion yuan (S$184.4 million) and hold a 40 per cent interest in the platform. 

Xiamen TCL Industrial Investment, a wholly owned subsidiary of Chinese electronics company TCL Technology Group, will separately acquire 43.7 million shares, representing 1.9 per cent of Shanshan’s total share capital. The voting rights for these shares will be granted to the platform. 

Yangzijiang Financial said that, in the next phase, a limited partnership will be established with a service trust managed by China Orient Asset Management as a limited partner. This partnership will acquire 20 million additional Shanshan shares, or 0.89 per cent of its total share capital, with voting rights also entrusted to the platform. 

Additionally, the sellers’ remaining voting rights will be handed over to the platform. 

Yangzijiang Financial said that, following the restructuring’s completion, it will exercise the effective voting rights of 23.4 per cent in Shanshan, as general partner of the platform on behalf of the consortium. 

It added that the 1.02 billion yuan investment is around 4.8 per cent of the group’s net asset value as at Jun 30, and is 4.5 per cent of its market capitalisation as at Oct 1. 

However, it cautioned that the agreement remains subject to authorities’ approval, with “no certainty or assurance that it will become effective or be completed”. 

“In addition, there is no certainty whether the consortium will be able to fulfil its funding obligations under both (phases),” said Yangzijiang Financial, adding that the completion timeline for the reorganisation and final shareholder structure are therefore subject to change. 

Ren Yuanlin, executive chairman and chief executive officer of Yangzijiang Financial, said the group’s investment capitalises on the gradual recovery of China’s economy. 

“It aligns well with our investment philosophy of supporting companies with solid business fundamentals, established market presence and strong industry partnerships, but require fresh capital to unlock growth or navigate restructuring, an area where we have proven expertise,” he said.

Ren added that Yangzijiang Financial will continue pursuing “promising opportunities that strengthen its core investment portfolio… (and) generate sustainable returns to shareholders”.  

Founded in 1992, Shanshan produces and sells lithium battery anode materials and polarisers, which are used in the new energy, battery and electric vehicle industries.

In February, the company’s controlling shareholder, Shanshan Group, entered a court-led bankruptcy reorganisation. Bloomberg reported that month that the lithium battery company had five yuan-denominated bonds, with a total of 5.1 billion yuan outstanding.

Yangzijiang Financial shares closed 1.7 per cent or S$0.02 lower at S$1.18 on Wednesday, prior to the announcement.