Smarter Energy Intends to Expand Capacity in Lithium Battery Through A Private Placement of RMB 3.1 Billion

After one-day temporary suspension, Smarter Energy released its private placement plan today, which intends to raise funds of about RMB 3.114 billion through a private placement at RMB 9.02/ share; of which, RMB 2.514 billion will be used to invest in Far First’s annual 3G Wh high energy density power and energy-storage lithium battery R&D and industrialization project; RMB 600 million will be used to supplement working capital. After completion of the transaction, the company will expand the capacity in power and energy storage lithium battery, and further improve the corporate industrial chain.

According to the plan, the number of the non-public offering will be 345 million shares. After the offering, the company's actual controller will still be Jiang Xipei, which will not cause changes to the corporate control rights.

The plan shows the total investment in Far East’s annual 3G Wh high energy density power and energy storage lithium battery R&D and industrialization project will be RMB 3.889 billion, which is going to build 6 fully-imported power battery core production lines, 3 PACK production lines, and a fully automatic PACK production line with an annual output of 130,000 sets; 4 imported steel shell and 20 imported cap production lines, as well as other accessory equipment, to achieve capacity of an annual output of 3G Wh power and energy-storage lithium batteries.

The company said in 2015 Far East First achieved a good performance by successfully accessing to the field of lithium battery through acquisition, showing satisfactory synergy effects and economic benefits. Far East First is a domestic leading enterprise in 18650 lithium battery, with the output ranking the third globally, only behind Samsung and Panasonic. The fundraising will consolidate its leading position.

In addition, the company plans to apply part of the funds raised, or RMB 600 million, to supplementing working capital, in order to optimize the corporate capital structure,  meet the company’s funding needs by future business development, reduce the financial costs, and improve the company's profitability.

According to Smarter Energy, through the non-public offering the company intends to further improve its smarter energy solutions industry chain, from planning and design, product services, construction and installation, operation and maintenance management, energy efficiency management to turnkey services; meanwhile, expand the company's capacity in power and energy-storage lithium battery. After implementing the fundraising for investment project, the company will strengthen the layout in smarter grid operation and maintenance, energy storage device, distributed energy and other energy Internet links, to further consolidate the industry chain layout featured by "smarter energy, intelligent city”.