CATL Plans to Acquire 25% Equity of Yongtai Technology’s Subsidiary for $78.3 Million

On Sunday evening, Zhejiang Yongtai Technology Co., Ltd., a leading Chinese manufacturer of fluoric fine chemical products, announced that Yingke Hengtong, a shareholder of its holding subsidiary Shaowu Yongtai High-Tech Materials Co., Ltd, planned to transfer its 25% stake in the subsidiary to Contemporary Amperex Technology Co., Limited (CATL) for 500 million yuan ($78.3 million). According to the law, Yongtai Technology agreed to give up the preemptive right to purchase 25% equity of Yongtai High-tech Materials in the process of equity transfer.

Regarding CATL’s acquisition of 25% equity of Yongtai High-Tech Materials, Yongtai Technology said that the introduction of the new industrial investor will help the company deepen cooperation with downstream manufacturers in the field of lithium batteries. The company’s waiver of the preemptive right of this equity transfer is based on the overall consideration of the company’s long-term development strategy and business planning.

After giving up the preemptive right this time, the current business scope of Yongtai High-Tech Materials will remain unchanged, and will therefore not affect the shareholding ratio and the consolidated statement of Yongtai Technology. The company’s financial situation, production and operations will also remain unaffected, leaving no damage to the interests of the company and all shareholders.

According to public information, Yongtai High-Tech Materials was registered in Jintang Industrial Park, Shaowu City, Fujian Province. As the main source of LiPF6 (lithium hexafluorophosphate) and LIFSI production capacity of Yongtai Technology, Yongtai High-Tech Materials owns 2,000 tons of LiPF6 and 500 tons of new lithium difluorosulfonimide LIFSI. It is estimated that the total production capacity of LiPF6 will reach 8,000 tons by the end of 2021. As of September 30, Yongtai High-Tech Materials had total assets of 713 million yuan and net assets of 505 million yuan. In the last three quarters of this year, its operating income was 530 million yuan and net profits were 264 million yuan.

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Since the beginning of this year, the price of lithium salt products, especially LiPF6, has soared. According to Baiinfo, the average market price of LiPF6 has risen to 540,000 yuan/ton, which is 404.67% higher than that at the beginning of the year.