Zhiyang Innovation terminates major asset restructuring

Beijing Business Daily (Reporter Ma Huanhuan, Li Jiaxue) — On the evening of February 25, Zhiyao Innovation (688191) announced that the company has terminated its plans for a major asset restructuring. The company’s stock will resume trading starting from the market open on February 26.

The announcement states that Zhiyao Innovation originally planned to acquire control of Shenzhen Lingming Photonics Technology Co., Ltd. (hereinafter referred to as “Lingming Photonics”) through methods such as issuing shares, privately issuing convertible bonds (if any), and paying cash (if any), while also planning to raise supporting funds.

Zhiyao Innovation stated that due to changes in the market environment, the two parties failed to reach an agreement on the core terms of the transaction, and have decided to terminate the planning of this major asset restructuring. This termination will not adversely affect the company’s business operations, production activities, or financial condition.

Later that evening, Zhiyao Innovation also disclosed that the company plans to inject capital into Lingming Photonics and purchase some of its equity (if any) with cash, with an initial investment amount of approximately 300 million yuan. Based on the latest round of financing post-investment valuation, the pre-investment valuation of the target company is preliminarily estimated to be between 2.7 billion and 3 billion yuan, with a post-investment shareholding ratio of about 9.09% to 10%. The funding source will be from the company’s own and self-raised funds. After this investment is completed, the company is expected to become an important shareholder holding more than 9% of the target company, with the right to nominate a candidate for the company’s director and a veto right over the overall sale of the target company. The target company is expected to become an associated company of the company. As of now, the company has no plans to seek control of the target company.