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TAIPEI - Hon Hai (TW:2317) Precision Industry Co., Ltd. (TWSE:2317), also known as Foxconn (SS:601138), has announced the disposal of its equity in Shenzhen Hengdrive Electric Co., Ltd. through its subsidiary Fulian Yuzhan Technology (Shenzhen) Co., Ltd. The transaction, which took place on Tuesday, involves a total monetary amount of RMB 351,498,000.
The shares were sold to a consortium of financial and venture capital firms, including Kunli (Shenzhen) Financial Consulting Enterprise, Guangzhou Suikai Zhizao Equity Investment Partnership, and several others. Notably, none of the trading counterparties are related parties to Hon Hai, ensuring an arm’s length transaction.
Hon Hai’s board of directors approved the sale based on market conditions following negotiations. The company reported a profit of RMB 22.38 million from the disposal. This sale marks Hon Hai’s exit from Shenzhen Hengdrive, with the company now holding a 0% shareholding percentage and no restrictions on rights.
The transaction’s concrete purpose, as stated by Hon Hai, is to realize investment benefits. There were no dissenting opinions from directors regarding the sale, and no related parties were involved in this transaction.
Hon Hai’s decision to dispose of the shares aligns with the company’s financial strategy, with the ratio of securities investment to total assets standing at 0.1677% and to owners’ equity at 0.3702%. This move comes as the company’s operating capital is reported at NTD -252,428,890,000.
The transaction did not involve any broker fees, and the source of funds for the disposal was private capital. RSM China CPA LLP Shenzhen Branch, with CPA Ping Li bearing practice certificate number 510100290522, has not issued any unreasonable opinion regarding the transaction.
This divestment does not indicate a change in Hon Hai’s business model, and there is no additional information on past or expected future transactions with the counterparties. The information is based on a press release statement provided by RNS, the news service of the London Stock Exchange (LON:LSEG).
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