Yehui spent 804 million yuan to subscribe for common shares of Yelian Private Equity, increasing its shareholding to 35.46%

Yehui announced today that it will spend 804 million yuan to participate in the subscription of private equity common shares of Yelian Steel, steel diagram. (File photo)

[Reporter Fang Weijie/Taipei Report] Yehui (2023) announced today that it will spend 804 million yuan to participate in the subscription of Yelian Steel private equity common shares, subscribing for 134 million shares at 6 yuan per share. After completion, its direct shareholding ratio in Yelian will increase from 34.05% to 35.46%. The funds introduced by Yelian this time will be invested in major transformation projects such as energy-saving and environmentally friendly electric furnaces, hot and cold rolling production line upgrades, and carbon steel production capacity expansion, while also improving the financial structure and reducing interest burdens.

Yehui said that the company currently holds 1,096,666,515 shares of Yelian, with a direct shareholding ratio of 34.05%. This time it participated in the subscription of 134 million private equity shares of Yelian, with a private placement price of 6 yuan per share and an investment amount of 804 million yuan. After the subscription is completed, the company holds a total of 1,230,666,515 shares of Yelian, and the direct shareholding ratio increased to 35.46%.

Regarding the private placement price of 6 yuan per share, Yehui pointed out that the price is based on the price rationality opinion issued by Crowe Horwath Certified Public Accountants. The reasonable price range per share is 4.71 yuan to 6.99 yuan, so the private placement price is still within the reasonable price range.

In terms of the use of funds, Yelian plans to invest private equity funds into "high-efficiency, energy-saving and environmentally friendly electric furnaces", modernization, automation and intelligent construction of hot-rolling and cold-rolling production lines. At the same time, it will promote the expansion of high-value product portfolio and carbon steel production capacity, improve the utilization rate of green energy and circular economy, and launch a series of production line transformation plans.

Yehui mentioned that through financial support for the modernization and energy-saving upgrade of the upstream Yelian production line, it can further ensure that the electric furnace hot-rolled steel coils produced by Yelian meet the needs of Yehui's high-end plated and baked products in terms of processability, surface quality and coating adhesion. This will strengthen the connection between upstream material sources and downstream products, taking into account low carbon emissions and product quality.

In addition to upgrading the production line, the private equity funds will also be used to improve Yelian's financial structure, reduce interest burdens and strengthen operational resilience. Yehui believes that the improvement of Yelian's profitability and the expansion of its operating scale will also be reflected in the reinvestment income recognized by Yehui's equity method, forming a synergistic effect of improved upstream operations, stable downstream material sources and overall profit feedback.