Yangzijiang Financial aborts one billion yuan investment in Chinese lithium battery producer

Subsidiary Jiangsu New Yangzi Commerce & Trading and two strategic investors fail to secure approval from Ningbo Shanshan’s creditors

Yangzijiang Financial said the plans to pump one billion yuan (S$S$183.1 million) in Ningbo Shanshan’s restructuring will not proceed after creditors of the lithium battery producer rejected the proposed investment.

The investment, wealth and fund manager updated the proposed transaction in a bourse filing on Thursday (Nov 6), saying that its wholly owned subsidiary, Jiangsu New Yangzi Commerce & Trading, and two strategic investors did not manage to secure an approval from Ningbo Shanshan’s creditors.

Therefore, the reorganisation investment agreement entered into in September to obtain a 23.4 per cent effective voting rights in Ningbo Shanshan to lead the latter’s restructuring exercise has been aborted.

Yangzijiang Financial’s board does not expect this to have any material adverse impact on the group.

Shanshan produces and sells lithium battery anode materials and polarisers, which are used in the new energy, battery and electric vehicle industries.

In February, its controlling shareholder, Shanshan Group, entered a court-led bankruptcy reorganisation. Bloomberg reported that month that the lithium battery company had five yuan-denominated bonds, with a total of 5.1 billion yuan outstanding.

Shares of Yangzijiang Financial closed S$0.01 or 1 per cent higher at S$1.06 on Thursday, before the announcement.