On June 30, 2020, Ningbo Zhenhai Investment Co., Ltd. (hereinafter referred to as "Zhenhai Investment") and Zhang Yuanyuan signed a share transfer agreement, pursuant to which Zhenhai Investment shall, by way of agreement, purchase 78,780,000 shares of Zhejiang Dehong Automobile Electronic & Electrical Equipment Co., Ltd. (stock code: 603701, hereinafter referred to as "Dehong" or "Listed Company") held by Zhang Yuanyuan at an aggregate price of approximately RMB1.087 billion, representing 29.99% of the total share capital of Dehong. According to Dehong’s announcement on August 6, 2020, the transfer registration in respect of all 78,780,000 shares had been completed. The controlling shareholder of Dehong was changed into Zhenhai Investment and the actual controller was changed into the Ningbo Zhenhai State-owned Assets Management and Service Center. As legal counsel, JunHe provided legal service to Zhenhai Investment in its acquisition of control over Dehong (hereinafter referred to as “the Project”).
The purchaser in this transaction, Zhenhai Investment, was established on July 9, 2003 with its registered capital of RMB 700 million. As a wholly State-owned company in Zhenhai District, its core business includes investment, construction and operation of urban infrastructure, highway and bridge construction, land development and consolidation, asset operation, industrial investment, investment, construction and development of affordable housing projects; real estate development and operation; comprehensive water-based resources investment, development, operation, management, technical consultation and technical services.
The target company in this transaction, Dehong, went listed in Shanghai Stock Exchange in 2016. After years of operation and development, Dehong has developed a comprehensive advantage in the market of commercial vehicles supporting generators and taken a leading position in the domestic industry in terms of scale and technology. This is a strategic investment of Zhenhai Investment based on the long-term confidence in the industry of automobile parts, and the recognition of Dehong’s business philosophy, development strategy and development potential as a listed company.
JunHe provided comprehensive legal services to the purchaser all the way in this transaction, including: (1) provided efficient and professional legal due diligence investigation within a limited period of time; (2) participated in designing of the transaction plan and negotiation of the acquisition agreement, provided the purchaser with targeted acquisition proposal by considering the particular situation of the counterparty; and (3) issued the legal opinion, and assisted the purchaser in applying for State-assets related approval and obtaining approval reply from SASAC.
In this transaction, JunHe overcame the Covid-19 pandemic and completed the project in a relatively short period of time. With our efficient, rigorous and steady work and professional attitude, JunHe was highly recognized d by the client and other intermediate agencies involved in the project.
The leading partner of the project is Mr. YOU Yi.