On the evening of July 1, Huayi Group (600623) announced that it plans to acquire Shanghai Huayi Industrial Gas Co., Ltd.(Industrial Gas Company) held by Shanghai Huayi Holding Group Co., Ltd.(Shanghai Huayi), a related party of the company, for a price of 832 million yuan in cash. After this equity acquisition, the company's related transactions with Shanghai Huayi will be reduced to avoid horizontal competition.

    It is understood that in order to meet the future goal of adjusting the industrial layout of Wujing Base, after consultation with all parties, Shanghai Huayi, the controlling shareholder of Huayi Group, selected the Shanghai Chemical Industry Zone and used the project land owner Industrial Gas Company as the main body to build synthesis gas supply and supporting projects (syngas projects). In order to enable the gas company's syngas project to be completed and put into operation as soon as possible, Huayi Group and Shanghai Huayi signed an agreement to avoid industry competition and an equity custody agreement.

    In view of the fact that the construction of the Industrial Gas Company's syngas project has started, Huayi Group plans to initiate the acquisition of the equity of the Industrial Gas Company held by Shanghai Huayi. After research, Huayi Group plans to use its own funds to acquire 60% equity of the Industrial Gas Company held by Shanghai Huayi. This transaction is based on the evaluation benchmark date of March 31, 2024 with an evaluation value of 100% equity of the Industrial Gas Company of 1.387 billion yuan as pricing basis.

    The announcement shows that the total investment of the Industrial Gas Company's synthesis gas project is 5.3 billion yuan and is planned to be put into operation in 2025. As of now, the project has completed filing, construction application, energy evaluation, safety evaluation, environmental assessment, basic design, planning permit, construction permit, etc. For the preliminary approval work, the main projects have completed the signing of engineering contracts and the commencement of civil engineering. Source: Huayi Group