Source: Glonway


GLONGON On October 12, Dongyue Group (00189.HK) announced that on October 12, 2018, the company indirectly controlled 77% of Dongyue Organic Silicon. In respect of the proposed spin-off, Dongyue Silicone will issue a certain number of new A-shares on the GEM of the Shenzhen Stock Exchange in the form of an initial public offering to the public or other means approved by the China Securities Regulatory Commission.


According to the estimation of the board of directors and the capital requirements of Dongyue Silicone, Dongyue Organic Silicon plans to issue no more than 300 million new A shares (“sale shares”), which is equivalent to the release of Dongyue Silicone after the proposed spin-off. The total number of shares is 25%. The number of actual Offer Shares to be issued by Dongyue Silicone will be subject to market conditions and the relevant rules and regulations of the China Securities Regulatory Commission (as amended from time to time).


It is expected that the company will indirectly control Dongyue Silicone not less than approximately 57.75% after the completion of the proposed spin-off, so Dongyue Silicone will remain a non-wholly owned subsidiary of the company.


Dongyue Silicone is principally engaged in the production and sale of silicone products. Silicone products are key ingredients in industrial processing and are widely used in military, aerospace, automotive, electronics and construction industries, mainly in the form of sealants, additives, chemical stabilizers and lubricants.


In 2016 and 2017, Dongyue Organic Silicon achieved a profit after tax of RMB 44.033 million and RMB 285 million, respectively. Dongyue Organic Silicone had a net asset value of RMB 743 million as of December 31, 2017.