XINGDA INT'L: Jiangsu XINGDA Steel Cord plans to reduce its registered capital by approximately 152 million yuan

According to the announcement from XINGDA INT'L (01899), on June 25, 2025 (after trading hours), Faith Maple and the target company (Jiangsu XINGDA Steel Cord Co., Ltd.) entered into capital reduction agreements with Chengshan Group, Sailun Group, Triangle Tire, and Linglong Tire. Additionally, on June 25, 2025 (after trading hours), the target company entered into a capital reduction agreement with Dongying Rongju. According to the capital reduction agreements and the Dongying capital reduction agreement, the target company's registered capital of approximately RMB 152 million (equivalent to about HKD 166 million) will be reduced. Before the capital reduction, the target company was a non-wholly-owned subsidiary of the company, with approximately 70.32% held by Faith Maple (the company's wholly-owned subsidiary), 0.728% held by Chengshan Group, 0.728% held by Sailun Group, 0.728% held by Triangle Tire, 0.728% held by Linglong Tire, 2.386% held by Dongying Rongju, and 24.382% held by other shareholders of the target company. Following the capital reduction, the target company's registered capital will decrease from approximately RMB 2.862 billion (equivalent to about HKD 3.132 billion) to approximately RMB 2.711 billion (equivalent to about HKD 2.966 billion). After the capital reduction, the target company will be approximately 74.25% owned by the company and 25.75% owned by other shareholders. After the capital reduction, the target company will still be a subsidiary of the company, and the financial performance of the target group will continue to be consolidated into the group's financial statements. The target company mainly engages in the production and distribution of radial tire steel cords, bead wires, and other wires. Due to changes in the international business environment, Jiangsu XINGDA has suggested that the proposed spin-off be terminated. According to the terms and conditions of the capital increase agreement and the capital reduction agreement, if the target company does not complete the proposed spin-off by December 31, 2022, Chengshan Group, Sailun Group, Triangle Tire, and Linglong Tire have the right to withdraw their investment from Jiangsu XINGDA, amounting to 100% of the investment amount, plus interest calculated at 100% of the investment amount, at a simple annual interest rate of 8% from the date of full payment of the investment amount until the date of payment of the repurchase price, minus any dividends (including tax) declared and distributed by the target company related to the relevant equity (reduced amount). Therefore, Chengshan Group, Sailun Group, Triangle Tire, and Linglong Tire each entered into capital reduction agreements to withdraw their investments according to the reduced amounts specified in the capital increase agreement. As agreed by the contracting parties, the investment interest will be calculated from December 16, 2020, until the respective withdrawal dates of Chengshan Group, Sailun Group, Triangle Tire, and Linglong Tire (June 25, 2025). The total cost of withdrawing the investment of RMB 50 million is calculated to be RMB 55.9861 million, and accordingly, 20.833 million shares of the target company will be canceled, with the cancellation price equivalent to approximately RMB 2.69 per share of the target company (cancellation price). Since the proposed spin-off has been terminated, one of the target company's shareholders, Dongying Rongju, has also chosen to withdraw its investment in the target company. Considering the cancellation price and fair treatment of the target company's shareholders, the target company and Dongying Rongju agreed to cancel the shares held by Dongying Rongju in the target company at the cancellation price As of the date of this announcement, other shareholders of the target company have not expressed any intention to exit the target company