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Haier electric subscribed 1.647 billion Hong Kong dollars for 1.599 billion new shares of haoze clea

On November 2, Haier Electric Co., Ltd. and haoze water purification International Co., Ltd. jointly announced that after the market closing on November 1, 2019, Haier Electric Co., Ltd. and haoze water purification International Co., Ltd. entered into a subscription agreement. Haier Electric Co., Ltd. paid a total cash price of HK $1.647 billion, equivalent to HK $1.03 per share, and subscribed 1.599 billion new shares of haoze water purification, accounting for about 42.9% of the share capital of the latter after expansion. After the delivery, haoze is expected to become the flagship commercial water purification business platform of Haier Group.

Haoze clean water closed at HK $1.48 yesterday.

Haoze water purification said that due to its leasing business model, the development of its water purification business needs a large amount of early capital outflow. And because it needs time to realize the profits of these investments, together with China's relatively tight credit environment, it will lead to increased debt, net current liabilities and high capital costs.

The net income from haoze water purification was HK $1.62 billion. Haoze plans to use 60% of the net proceeds to repay the debt and 40% to use as general working capital.

According to the joint announcement, Haier electric and haoze are expected to cooperate closely in various fields, including product development, research, distribution, supply chain management (including but not limited to manufacturing and purchasing), service and investment management. In view of the potential synergies between the two groups, the directors of Haier electric expect that the transaction will bring favorable development opportunities for the commercial water purification business. The cooperation between the two groups will benefit both sides from each other's competitive advantages.