Hon Hai announces subsidiary share transactions totaling $106.4 million

TAIPEI - Hon Hai (TW:2317) Precision Industry Co., Ltd., widely known as Foxconn (SS:601138), has reported a series of inter-company share transactions involving its subsidiaries, with a combined total value of USD 106.4 million. The transactions, which took place on Thursday, involved the acquisition of common shares within its network of companies as part of a long-term investment strategy.

On Thursday, Foxteq Holdings Inc., a subsidiary of Hon Hai, acquired 266 million common shares of Foxteq Integration Inc. at a price of USD 0.1 per share, amounting to a total investment of USD 26.6 million. This transaction resulted in Foxteq Holdings Inc. holding 100% of Foxteq Integration Inc., with no restrictions on the rights of these shares.

In a similar move, Foxteq Holdings Inc. also obtained 100,000 common shares of PCE Paragon Solutions Kft. Each share was priced at USD 266, leading to an identical transaction value of USD 26.6 million and complete ownership.

Additionally, PCE Paragon Solutions Kft. secured a significant stake in Foxconn EV Technology Inc. by acquiring 6,650 common shares at a unit price of USD 4,000 each, totaling the same amount of USD 26.6 million. This transaction increased PCE Paragon Solutions Kft.’s shareholding to 80.381%.

The fourth transaction reported was by Foxconn EV Technology Inc., which invested USD 26.6 million to fully acquire Foxconn EV System LLC, although the number of shares and the price per unit were not specified.

These transactions were decided by the Board of Directors on Thursday and did not involve any brokers or broker’s fees. All counterparties are related parties, and the investments were made using self-owned funds with no change to the business model. The acquisitions are aimed at capital increases for the subsidiaries, and no dissenting opinions were recorded from the directors.

The press release did not disclose the specific impact on Hon Hai’s financial position, but it mentioned that the transactions represent a minor percentage of the total assets and equity attributable to the owners of the parent company. The source of funds for these transactions is reported to be self-owned by the company.

This information, based on a press release statement, suggests a strategic consolidation within Hon Hai’s subsidiaries, focusing on long-term investment and full ownership of the involved entities.

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