Jiangsu Fasten Company Limited (000890) has disclosed a major asset sale plan, intending to transfer a 10% stake in Bekaert Steel Cord.
On the evening of October 22, Jiangsu Fasten announced that the company signed a Memorandum of Understanding with BEKAERT STEEL CORD PRODUCTS HONG KONG LIMITED (referred to as "Hong Kong Bekaert"). Under the agreement, Jiangsu Fasten plans to transfer its 10% stake in China Bekaert Steel Cord Co., Ltd. (referred to as "Bekaert Steel Cord") for cash.
Upon completion of this transaction, Jiangsu Fasten will no longer hold any equity in Bekaert Steel Cord. Before the transaction, the counterparty, Hong Kong Bekaert, owned 90% of the target company. After the transaction, the counterparty will hold 100% of the stake.
According to disclosures, Bekaert Steel Cord is projected to achieve a revenue target of 1.588 billion yuan in 2024, while Jiangsu Fasten is set to reach 312 million yuan. The revenue associated with the 10% stake in Bekaert Steel Cord accounts for 50.85% of Jiangsu Fasten's revenue. Jiangsu Fasten stated that this transaction constitutes a major asset restructuring.
Bekaert Steel Cord was established on December 29, 1992, and is Bekaert's first steel cord factory set up in mainland China. The company primarily produces and sells steel cord for tire reinforcement, with overseas exports mainly to Japan, North America, and Southeast Asia, while serving tire manufacturers in Southern and Eastern China domestically. Bekaert Steel Cord products are recognized for their advanced technology and high quality, positioning the company favorably within the industry.
In recent years, Jiangsu Fasten's main businesses have included metal products and environmental protection. The metal product business focuses on producing and selling a variety of wire and wire rope products with specifications ranging from 0.8mm to 8.0mm, primarily sold to deep-processing enterprises of wire and wire rope.
In the announcement, Jiangsu Fasten indicated that its metal products business is relatively traditional and does not align with the company's future business development strategy. This transaction will assist the company in gradually divesting traditional businesses, enhancing asset liquidity, and providing financial support for the development of its main business, thereby achieving resource integration and improving ongoing operational capabilities.
This transaction responds to Hong Kong Bekaert's need to adjust its business strategy and regain control of the business independently. Additionally, it reflects Jiangsu Fasten's objective need to gradually reduce traditional business lines, facilitating the revitalization of existing assets and improving operational liquidity. This will help provide financial support for the development of Jiangsu Fasten's main business, safeguard the interests of the company and its shareholders, and offer robust assurance for the company's sustainable development.
Following the completion of this transaction, the company's other equity investments will significantly decrease, and cash reserves will increase. The company plans to actively use the transaction proceeds to repay certain debts and supplement operational funds, thereby improving cash flow. This transaction is also expected to have some impact on the operating performance for the relevant accounting period.
The parties aim to sign a formal equity transfer agreement by the end of November 2025 and complete the transaction by the end of December 2025.
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