Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Jiangsu Lopal Tech. Co., Ltd.

江蘇龍蟠科技股份有限公司
(a joint stock company incorporated in the People's Republic of China with limited liability)
(Stock Code: 2465)

MAJOR TRANSACTION

IN RELATION TO PUT OPTIONS

THE SUBSCRIPTION

The Board is pleased to announce that on February 21, 2025 (after trading hours), LBM, the Target Company and the Investor entered into the Subscription Agreement and the Shareholders Agreement, and the Company, Changzhou Liyuan, LBM, the Target Company and the Investor entered into the Sider Letter Agreement. Pursuant to the Subscription Agreement, at the Closing, the Target Company shall issue to the Investor, and the Investor shall subscribe for, a total of 255,930.64 newly issued Target Shares for an aggregate subscription price of USD15,970,911.12, which upon issuance will collectively represent 20% of the issued and outstanding share capital of the Target Company on a Fully Diluted Basis.

PUT OPTIONS AND PHASE 1 PUT OPTION

Pursuant to the Shareholders Agreement, in the event of a “Foreign Entity of Concern” issue or if LBM undergoes a Change of Control, the Investor will be granted Put Options, the exercise of which will entitle the Investor to liquidate its equity interest in the Target Company under the terms and conditions of the Shareholders Agreement.

Additionally, in the event of expiration of the term or termination not attributable to any party to the Phase 1 Offtake Agreement (as defined below), the Investor will also be granted a Phase 1 Put Option (as defined below) which will entitle the Investor to liquidate its equity interest in the Target Company at the price for the Target Shares paid by the Investor under the Subscription Agreement.

LISTING RULES IMPLICATIONS

The Target Company is a non wholly-owned subsidiary of the Company as at the date of this announcement. It is contemplated that, upon Closing, the Company will hold approximately 64.03% of the equity interest in the Changzhou Liyuan, which will hold 54.65% of the equity interest in LBM, and LBM and LBM Singapore (a wholly-owned subsidiary of LBM) will collectively hold 80% of the equity interest in the Target Company. Upon Closing, the Target Company will remain as a subsidiary of the Company and its financial results will continue to be consolidated with the Group. The Subscription, if materialized, will constitute a deemed disposal by the Company under Rule 14.29 of the Listing Rules. As the highest applicable percentage ratio (as defined under the Listing Rules) in respect of the Subscription does not exceed 5%, the Subscription does not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules.

Even if the Phase 1 Put Option may not materialize in the future, it is treated as if it had been exercised upon the execution of the Shareholders Agreement as the exercise of the Phase 1 Put Option is not at the Group's discretion. The Phase 1 Put Option, if materialized, will constitute an acquisition of the equity interest of the Target Company by LBM under the Chapter 14 of the Listing Rules. As at the date of this announcement, none of the Phase 1 Put Option has been exercised. As the highest applicable percentage ratio (as defined under the Listing Rules) in respect of the Phase 1 Put Option does not exceed 5%, the Phase 1 Put Option does not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules.

Even if none of the Put Options may materialize in the future, they are treated as if they had been exercised upon the execution of the Shareholders Agreement as the exercise of the Put Options is not at the Group's discretion. As the highest possible exercise price of each of the Put Options cannot be determined at the time of grant of each of the Put Options, the grant of each of the Put Options will be treated at least a major transaction pursuant to Rule 14.76(1) of the Listing Rules. Therefore, the grant of the Put Options will be subject to the reporting, announcement and Shareholders' approval requirements under Chapter 14 of the Listing Rules. As at the date of this announcement, none of the Put Options has been exercised. The Company will comply with applicable requirements under the Listing Rules upon the exercise of the Put Options and will also consult with the Stock Exchange as soon as practicable if the classification will change.

THE EGM

The EGM will be convened for the Shareholders to consider and, if thought fit, to approve, among other things, the Transaction Documents and the transactions contemplated thereunder.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, as at the date of this announcement, no Shareholders is required to abstain from voting on the resolution in respect of the Transaction Documents and the transactions contemplated thereunder at the EGM.

DESPATCH OF CIRCULAR

A circular in relation to, among other things, the Transaction Documents and the transactions contemplated thereunder, the notice of EGM, and other information required to be included therein under the Listing Rules, is expected to be despatched to the Shareholders on or before March 28, 2025, as additional time is needed for the preparation and finalisation of certain information for inclusion in the circular.

The Closing is subject to the satisfaction and/or waiver of the Conditions therein. In addition, the Subscription Agreement and the Shareholders Agreement may be terminated in certain circumstances. Shareholders and investors are advised to exercise caution when dealing in the securities of the Company.

THE SUBSCRIPTION AGREEMENT

The Board is pleased to announce that on February 21, 2025 (after trading hours), LBM, the Target Company and the Investor entered into the Subscription Agreement. Pursuant to the Subscription Agreement, at the Closing, the Target Company shall issue to the Investor, and the Investor shall subscribe for, a total of 255,930.64 newly issued Target Shares for an aggregate subscription price of USD15,970,911.12, which upon issuance will collectively represent 20% of the issued and outstanding share capital of the Target Company on a Fully Diluted Basis.

Principal Terms of the Subscription Agreement

The principal terms of the Subscription Agreement are set out below:

Date

February 21, 2025 (after trading hours)

Parties

(1) LBM
(2) the Target Company
(3) the Investor

(Collectively referred to as the "Parties", and each, a "Party")

To the best knowledge, information and belief of the Directors, having made all reasonable enquires, the Investor and its respective ultimate beneficial owner(s) are Independent Third Parties as at the date of this announcement.

Subscription

Subject to the terms and subject to the conditions of the Subscription Agreement, at the Closing, the Target Company shall issue to the Investor, and the Investor shall subscribe for, a total of 255,930.64 newly issued Target Shares (the “Subscription Shares”) for an aggregate subscription amount of USD15,970,911.12 (“Subscription Price”) at a per share subscription price of USD62.40, which upon issuance shall represent 20% of the issued and outstanding share capital of the Target Company on a Fully Diluted Basis immediately upon the Closing.

It is contemplated that, upon Closing, the Company will hold approximately 64.03% of the equity interest in Changzhou Liyuan, which will hold 54.65% of the equity interest in LBM, and LBM and LBM Singapore (a wholly-owned subsidiary of LBM) will collectively hold 80% of the equity interest in the Target Company. Upon Closing, the Target Company will remain as a subsidiary of the Company and its financial results will continue to be consolidated with the Group.

Subscription Price

The Subscription Price shall be paid by the Investor to the Target Company on the Closing Date in cash by wire transfer in accordance with the Subscription Agreement, and was determined based on arm's length negotiations between the Parties on normal commercial terms. The total Subscription Price of USD15,970,911.12 was determined after taking into account that the expected capital requirements of the Target Company, the amount of capital contributed by LBM to the Target Company of USD63,883,644.49 for 1,023,622.56 Target Shares (equivalent to USD62.40 per Target Shares) as of the date of the Subscription Agreement and that the Indonesia Phase 1 Plant has only commenced its operation. Upon Closing, the Target Company will be owned as to 80% by the Group and 20% by the Investor in proportion to the shareholders' capital contribution in the Target Company.

Use of Proceeds

The Target Company shall apply all the proceeds of the subscription by the Investor for the Subscription Shares for the construction and operation of the Indonesia Phase 1 Plant.

Conditions Precedent

Closing is subject to the satisfaction, on or prior to the Closing, of the conditions precedents (the "Conditions") summarised below:

(1) the representations and warranties made by the Target Company and LBM as set out in the Subscription Agreement (without giving effect to any materiality or Material Adverse Effect qualifications therein) shall be true and correct in all material respects as of the date of the Subscription Agreement and as of the Closing Date;

(2) the Target Company and LBM shall have performed in all material respects the covenants and obligations required under the Subscription Agreement to be performed by them prior to or at the time of the Closing;

(3) there has not occurred prior to the Closing Date any event or circumstance that results in or is reasonably expected to result in a Material Adverse Effect on the Target Company;

(4) all necessary corporate procedures have been completed by the Target Company;

(5) the Target Company and LBM shall have provided to the Investor written proof evidencing that (i) LBM has subscribed for 1,023,622.56 Target Shares for an aggregate subscription price of USD63,883,644.49 and (ii) construction of a manufacturing facility of the Target Company has been completed. As of the date of this announcement, the above subscription for 1,023,622.56 Target Shares by LBM has completed.;

(6) the representations and warranties made by the Investor as set out in the Subscription Agreement (without giving effect to any materiality or Material Adverse Effect qualifications therein) shall be true and correct in all material respects as of the date of the Subscription Agreement and as of the Closing Date;

(7) the Investor shall have performed in all material respects the covenants and obligations required under the Subscription Agreement to be performed by it prior to or at the time of the Closing;

(8) no order, stay, decree, judgment or injunction shall have been issued, entered, promulgated or enforced by any government authority of competent jurisdiction which restrains, prohibits or prevents the consummation of the transactions contemplated thereunder;

(9) all requisite approvals shall have been obtained or given, including but not limited to the completion of the merger filing in People's Republic of China;

(10) the Shareholders Agreement shall have been entered into and remain effective by and among the Investor, LBM and the Target Company; and

(11) the Phase 1 Offtake Agreement (as defined below) shall have been entered into by and between the Investor and the Target Company.

The Conditions set out in paragraphs (1) to (5) above and (6) to (7) above can be waived by the prior written approval of the Investor and Target Company, respectively. The Conditions set out in paragraph (1) to (5) above shall be satisfied to the satisfaction of the Investor as soon as possible and in any event on or before the Long-Stop Date. For the avoidance of doubt, any condition or requirement in relation to the Company's compliance with the Listing Rules cannot be waived by the Investor under any circumstances.

Closing

The Closing shall take place on the date falling on the fifteenth (15th) Business Day following the satisfaction or waiver (by the Party entitled to waive such condition) of all of the Conditions, or such other date, time or place as the Parties may agree in writing.

SHAREHOLDING STRUCTURE OF THE TARGET COMPANY

Set out below is the shareholding structure of the Target Company immediately before and after the Closing:

Shareholders	Immediately before the Closing		Immediately after the Closing
	Number of Target Shares	Approximately shareholding percentage (%)	Number of Target Shares	Approximately shareholding percentage (%)
LBM	1,023,622.56	99.99	1,023,622.56	79.99
LBM Singapore	100	0.01	100	0.01
Investor	—	—	255,930.64	20.00
Total	1,023,722.56	100.00	1,279,653.20	100.00

SHAREHOLDERS AGREEMENT

In connection with the Subscription Agreement, on February 21, 2025 (after trading hours), LBM, the Target Company and the Investor have entered into the Shareholders Agreement, which will take effect on and from the Closing Date. The principal terms of the Shareholders Agreement are set out below:

Date

February 21, 2025 (after trading hours)

Parties to the Shareholders Agreement

(1) LBM
(2) the Target Company
(3) the Investor

(Collectively referred to as the “Parties”, and each, a “Party”; LBM and the Investor being “Target Shareholders”)

Shareholders’ Rights and Obligations

The Shareholders Agreement sets out the rights and obligations of the Parties thereto in relation to the management and operations of Target Company and shall take effect upon the Closing Date. In particular, it contains the following key provisions in relation to the Investor’s rights and obligations as a shareholder of Target Company:

Pre-emptive right, right of first refusal and tag-along rights

The Investor shall enjoy the pre-emptive right, right of first refusal, tag-along right and drag-along right that are customary and not subordinated to other shareholders of the Target Company.

Rights in relation to Phase 1 and Phase 2 of the Business

Phase 1

LBM and the Investor acknowledge and agree that each shall participate in the initial phase of the Business (“Phase 1”) during which the production capacity of the Facility (as defined below) is targeted to meet the total annual capacity set forth in the offtake agreement entered into or to be entered into by and between the Target Company and the Investor (the “Phase 1 Offtake Agreement”). Upon expiration of the term or termination not attributable to any party to the Phase 1 Offtake Agreement, the Investor shall have an option to require LBM to purchase all of its Subscription Shares at the Subscription Price (the “Phase 1 Put Option”).

Phase 2

If LBM decides to establish an additional manufacturing facility in Indonesia for the production of the Products (as defined below) (“Phase 2 Facility” under “Phase 2”), it must notify the Investor in writing (“Phase 2 Notice”). The Investor will have the right to decide whether to participate in the Phase 2 Facility.

If the Investor elects to participate, the Phase 2 Facility shall be established by the Target Company and the terms of participation in the establishment of the Phase 2 Facility shall be substantially the same between LBM and Investor, provided that the participation ratio between LBM and Investor shall be subject to further discussion after the delivery of the Phase 2 Notice. A separate offtake agreement (the “Phase 2 Offtake Agreement”) will be entered into, pursuant to which the Investor shall have the right to purchase the Products on terms of pricing not less favorable than the Products price under the Phase 1 Offtake Agreement subject to discussion between the Investor and LBM.

If the Investor declines or does not respond to Phase 2 Notice, LBM may proceed to establish the Phase 2 Facility to be owned and maintained by an entity other than the Target Company or its subsidiaries with or without participation of permitted third parties.

As of the date of this announcement, both of the Phase 1 Offtake Agreement and the Phase 2 Offtake Agreement have been entered into.

Transfer Restrictions

From the Closing until the expiration date of the Phase 1 Offtake Agreement, Target Shareholders covenant and agree not to transfer any of their respective Target Shares (excluding any transfers to any Affiliate(s) of Target Shareholders in accordance with the Shareholders Agreement) without the prior written consent of the other party not transferring the Target Shares.

Right of Appointment

The Target Company shall have the following executives (the “Executives”):

(1) One (1) chief executive officer (the “CEO”), who shall be nominated by LBM and the Target Shareholders shall procure that such nominee is appointed to such position at the applicable meeting of the board of directors of the Target Company (“Target Board”); and

(2) One (1) deputy director of finance, who shall be nominated by the Investor and the Target Shareholders shall procure that such nominee is appointed to such position at the applicable Target Board meeting.

The board of the Target Company shall consist of three directors. LBM shall be entitled to nominate and have two directors elected and appoint one of the two directors to act as the president director who shall serve as the chairman of all meetings of the board of the Target Company. The Investor shall be entitled to nominate and have one director elected.

Put Options

FEOC

Each of the Parties acknowledges that the EV Products (as defined below) shall be (i) used to produce and sell “Eligible Components” (within the meaning of Section 45X(c)(1) of the U.S. Internal Revenue Code) that may be eligible for a “Advanced Manufacturing Production Credit” under Section 45(X) of the U.S. Internal Revenue Code, and (ii) used to manufacture or assemble lithium-ion batteries intended for vehicles that may qualify for the “Clean Vehicle Credit” under Section 30D of the U.S. Internal Revenue Code. Each of the Parties further covenants and agrees that the Products must not be manufactured, produced, or assembled by a “Foreign Entity of Concern” (“FEOC”), for which requirement, it covenants and agrees that none of the Parties is an FEOC.

In the event of a breach of the above covenants, LBM is required to notify the Investor promptly and take necessary action to rectify such breach (“FEOC Compliance Action”) within a reasonable period to be determined by the Investor (the “Adjustment Period”).

If the above covenants have not been complied with following the expiry of the Adjustment Period, or there is no FEOC Compliance Action that can be taken by LBM other than the sale of all of the Target Share by the Investor, the Investor shall have a put option (the “FEOC Put Option”) to require LBM to purchase all or any part of the Subscription Shares for a value corresponding to:

(1) in case of LBM’s refusal or failure to take the necessary FEOC Compliance Action, higher of (i) the price of the Subscription Shares paid by the Investor under the Subscription Agreement plus the value that corresponds to the Investor realizing an IRR of 12% on the price for the Subscription Shares paid by the Investor under the Subscription Agreement (for the avoidance of doubt, the sum of the price and the value equals to an amount that would enable the Investor to achieve an IRR of 12%), or (ii) 120% of the Fair Market Value of the Subscription Shares;

(2) where there is no available FEOC Compliance Action that may be taken by LBM, the price of the Subscription Shares paid by the Investor under the Subscription Agreement; or

(3) if the Target Company is deemed an FEOC due to the Investor being deemed an FEOC, the price of the Subscription Shares paid by the Investor under the Subscription Agreement.

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Chang of Control

In the event that LBM undergoes a Change of Control, it must immediately provide to the Investor written notice of its Change of Control (“CoC Notice”). The Investor, within a sixty (60) day period following its receipt of the CoC Notice, shall have a put option (the “Change of Control Put Option”) to require LBM to purchase all or any part of its Subscription Shares at a price at the higher of (i) the price of the Subscription Shares paid by the Investor under the Subscription Agreement plus the value that corresponds to the Investor realizing an IRR of 12% on the price for the Subscription Shares paid by the Investor under the Subscription Agreement (for the avoidance of doubt, the sum of the price and the value equals to an amount that would enable the Investor to achieve an IRR of 12%), or (ii) 120% of the Fair Market Value of the Subscription Shares.

Termination of the Shareholders Agreement

Termination Attributable to LBM or the Target Company

Upon the termination of the Shareholders Agreement by the Investor in accordance with the Shareholders Agreement, the Investor shall have the right, but not the obligation, to require LBM to purchase all Subscription Shares at the Subscription Price (plus interest under a certain circumstance as set out in the Shareholders Agreement), except for the circumstances below.

Where the Shareholders Agreement is terminated by the Investor for the following reasons attributable to LBM or the Target Company, the Investor shall have the right but not the obligation to require LBM to purchase all Subscription Shares at a price at the higher of (i) the Subscription Price plus the value that corresponds to the Investor realizing an IRR of 12% on the Subscription Price (for the avoidance of doubt, the sum of the price and the value equals an amount that would enable the Investor to achieve an IRR of 12%), or (ii) 120% of the Fair Market Value of the Subscription Shares:

(1) LBM or the Target Company is in material breach of its obligation under Shareholders Agreement, and, if the breach is capable of remedy, fails to remedy the breach within sixty (60) days;

(2) LBM or the Target Company becomes insolvent or makes any assignment for the benefit of creditors or similar transfer evidencing insolvency, or suffers or permits the commencement of any form of insolvency or receivership proceeding, or has any petition under bankruptcy law filed against it, which petition is not dismissed within sixty (60) days of such filing, or has a trustee, administer or receiver appointed for its business or assets or any part thereof; and

(3) the Target Company is in breach of its obligation under the Phase 1 Offtake Agreement or the Phase 2 Offtake Agreement, which breach constitutes a ground for termination of the Phase 1 Offtake Agreement or the Phase 2 Offtake Agreement.

Termination Attributable to the Investor

In the event the Shareholders Agreement is terminated by LBM for the reasons attributable to the Investor in accordance with the Shareholders Agreement, LBM shall have the right but not the obligation to require the Investor to purchase all Subscription Shares at the Subscription Price.

SIDE LETTER AGREEMENT

In connection with the Subscription Agreement and the Shareholders Agreement, on February 21, 2025 (after trading hours), the Company, Changzhou Liyuan, LBM, the Target Company and the Investor have entered into the Side Letter Agreement with immediate effect. The principal terms of the Side Letter Agreement are set out below:

Date

February 21, 2025 (after trading hours)

Parties to the Shareholders Agreement

(1) the Company
(2) Changzhou Liyuan
(3) LBM
(4) the Target Company
(5) the Investor

Covenants and Guarantee

The Company and Changzhou Liyuan shall be jointly and severally liable to pay USD2,000,000 (the "Penalty") to the Investor in cash for any failure by the Company or Changzhou Liyuan to perform the covenants and guarantee below:

Covenant to Not Encumber

During the term of the Shareholders Agreement, each of the Company and Changzhou Liyuan shall not, and shall cause their respective Affiliates not to, establish or permit to be established upon any of the outstanding shares of capital stock of the Target Company or LBM, or any property or asset owned, operated or used (or held for use) by the Target Company any Encumbrances whatsoever without the prior written consent of the Investor, other than as permitted under the Shareholders Agreement.

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Claims of Creditors

To the extent permitted by applicable laws, each of the Company and Changzhou Liyuan acknowledge and agree that during the term of the Shareholders Agreement, none of the outstanding shares of capital stock of the Target Company or any property or asset owned, operated or used (or held for use) by the Target Company shall be subject to claims of creditors of, or to legal process resulting from activities of, it or its Affiliates.

Guarantee

The following guarantee is to be a continuing guarantee and accordingly, shall remain in full force and effect until all Guaranteed Obligations (as defined below) have been fully satisfied:

(1) the Company and Changzhou Liyuan hereby jointly and severally guarantee, the full, prompt and faithful payment, performance and observance of all obligations, covenants and undertakings of the Target Company and LBM under or pursuant to the Shareholders' Agreement, including without limitation, any obligation to make payments, comply with covenants or indemnify the Investor (the "Guaranteed Obligations");

(2) in the event of any failed performance of the Guaranteed Obligations, the Investor shall provide written notice and grant a reasonable period for the Target Company or LBM to cure such failure. If the Target Company or LBM does not cure the failure within such period, the Company and Changzhou Liyuan shall, at the request of the Investor, perform or cause the performance of such obligations to the full extent required under the Shareholders' Agreement; and

(3) the Company and Changzhou Liyuan further agree to indemnify and hold the Investor harmless from and against any and all Losses incurred as a result of such failure by the Target Company or the LBM to perform the Guaranteed Obligations.

For the avoidance of doubt, the Investor may seek additional damages arising from such breach under the Side Letter Agreement or under the applicable laws, and any payment of the Penalty shall not be considered as the Investor's sole and exclusive remedy.

Indemnification

The Company and Changzhou Liyuan shall jointly and severally indemnify and hold harmless the Investor from and against any Losses incurred by the Investor that directly or indirectly arise out of, result from, are based upon or relate to (i) any inaccuracy or breach of certain representations and warranties made by the Company and Changzhou Liyuan as set out in the Side Letter or (ii) any failure by the Company or Changzhou Liyuan to perform the covenants, obligations or agreements required to be performed by it under the Side Letter Agreement and the applicable laws.

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Right to Subscribe for Shares in LBM

Pursuant to the Side Letter Agreement, in case of a Qualifying IPO, the Investor may, at its option, request for the right to subscribe for the Qualifying Pre-IPO Shares (such right, the “IPO Subscription Right”) by contributing all or any part of its Target Shares (the “Investor Shares”) to LBM as consideration for subscription to the Qualifying Pre-IPO Shares. If the Investor decides to exercise the IPO Subscription Right, LBM and the Investor shall engage in the calculation of the Fair Market Value of the shares of the Target Company and LBM. The number of shares of LBM to be issued by LBM and to be subscribed by the Investor as a result of the exercise of IPO Subscription Rights will be equal to (x) the Investor Shares Price multiplied by the number of Investor Shares divided by (y) Qualifying Pre-IPO Shares Price.

In the event that the exercise of the IPO Subscription Right has been exercised and the issuance of Qualifying Pre-IPO Shares has been completed but LBM fails to consummate a Qualifying IPO on or prior to the date that falls six (6) months after the anticipated date of the Qualifying IPO, the Investor, by sending a written notice to Changzhou Liyuan or LBM, may exercise a right to swap its Qualifying Pre-IPO Shares for shares of the Target Company, for which swap, the Fair Market Value of the shares of the Target Company and the LBM calculated in accordance with the Side Letter Agreement. The Investor shall contribute all of the Qualifying Pre-IPO Shares to the LBM as consideration for the acquisition of the number of shares of the Target Company equal to the number of Investor Shares.

INFORMATION OF THE COMPANY AND THE PARTIES

The Company and the Group

The Company, a joint stock company established in the PRC, the A shares of which are listed on the Shanghai Stock Exchange (SSE: 603906) and the H shares of which are listed on the Main Board of the Stock Exchange (HKEX: 2465). The Group is principally engaged in the production and sale of LFP cathode materials and automotive specialty chemicals.

The Target Company

The Target Company is a foreign investment company established under the laws of the Republic of Indonesia in February 2023 and an indirect non-wholly owned subsidiary of the Company which is owned as to 99.99% by LBM. The Target Company is principally engaged in the research, production and sale of LFP cathode materials.

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Set out below is the financial information extracted from the financial statements of the Target Group for the year ended December 31, 2023 and for the nine months ended September 30, 2024:

	Year ended December 31, 2023	Nine months Ended September 30, 2024
	RMB'000 (audited)	RMB'000 (unaudited)
Total assets	498,170.4	738,806.2
Total liabilities	126,961.0	256,834.5
Revenue	—	—
Profit/(loss) before taxation	8,549.2	(5,174.2)
Profit/(loss) after taxation	9,409.9	(3,959.5)

The unaudited consolidated net assets of the Target Group as at September 30, 2024 amounted to approximately RMB482.0 million.

LBM

LBM is a private company limited by shares incorporated in Singapore and an indirect non-wholly owned subsidiary of the Company which is owned as to 54.65% by Changzhou Liyuan. LBM is principally engaged in investment, asset management and import and export trading of LFP cathode materials.

Reference is made to the announcement of the Company dated December 20, 2024, and the circular of the Company dated January 8, 2025, in relation to the deemed disposal of the equity interest in LBM by the Company. The Company, Changzhou Liyuan, LBM and relevant investors have entered into a subscription agreement (the "LBM Agreement") in relation to the subscription of shares of LBM by the investors (the "LBM Subscription"). As of the date of this announcement, the LBM Subscription has been completed pending the relevant registration for the LBM Subscription. Upon the completion of the LBM Subscription, LBM is owned as to 54.65%, 34.01% and 11.34% by Changzhou Liyuan, PT Akasya Investasi Indonesia and Aisis Alliance L.P., respectively. For further details, please refer to the aforesaid announcement and circular of the Company.

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Changzhou Liyuan

Changzhou Liyuan is a limited liability company established in the PRC and a direct non-wholly owned subsidiary of the Company, which is owned as to approximately 64.03% by the Company. In addition to the Company, the remaining equity interests in Changzhou Liyuan are held by nine other shareholders, with none of them individually holding more than 6.5% of the equity interests. Changzhou Liyuan is principally engaged in the production and sales of LFP cathode materials.

Investor

The Investor is a company established in 2020 and listed on the Korea Exchange (Stock Code: 373220.KS), primarily engaged in the automotive battery business. Its operations include researching and providing technical support for batteries, components, BMS (Battery Management System), and battery packs.

FINANCIAL EFFECTS OF THE SUBSCRIPTION

As the Subscription will not result in the Company's loss of control over the Target Group, the Subscription would be accounted for as an equity transaction and will not result in the recognition of any gain or loss in the Company's consolidated statement of profit or loss and other comprehensive income.

REASONS FOR AND BENEFITS OF THE SUBSCRIPTION

The Directors are of the view that the Subscription will strengthen the Group's overall capabilities in research and development, market expansion, and mass production of lithium iron phosphate cathode materials within the industry. The Subscription will also enhance the Group's international presence and comprehensive competitive edge, which will further improve the Group's brand value and increase its profitability potential. Therefore, the Subscription aligns with the Group's overall strategic development plan and long-term interests, carrying positive strategic significance for the Group's future development. Based on the above, the Directors are of the view that the terms of the Transaction Documents and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LISTING RULES IMPLICATIONS

THE EGM

The EGM will be convened for the Shareholders to consider and, if thought fit, to approve, among other things, the Transaction Documents and the transactions contemplated thereunder.

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DESPATCH OF CIRCULAR

DEFINITIONS

In this announcement, the following expressions shall, unless the context requires otherwise, have the following meanings:

"Affiliate" with respect to any party to the Subscription Agreement and Shareholders' Agreement, any entity that, directly or indirectly, controls, is controlled by, or is under common control with such party at any time during the period for which the determination of affiliation is being made

"Board" the board of Directors

"Business" the business of the Target Company, the main components of which consist of (i) the construction, operation and maintenance of a manufacturing facility (the "Facility") for the process improvement and production of the cathode active materials for use in electronic vehicle batteries (the "EV Products"), energy storage system (the "ESS Products"), and other lithium battery products (together with the EV Products and the ESS Products, the "Products"), (ii) the materials development and procurement, sale, distribution and otherwise commercialization of the Products, (iii) any other activities and businesses as mutually agreed to between the parties to the Shareholders Agreement and (iv) any other activities related and/or ancillary to the foregoing

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“Business Day” any day that is not a Saturday, Sunday or other day on which banks are required or authorized by Law to be closed in Jakarta, Indonesia or Seoul, Korea

“Change of Control” in relation to any party to the Shareholders Agreement, any direct or indirect change of control of such party (whether through merger, consolidation, sale of shares or other equity interests, or otherwise), through a single transaction or series of related transactions, provided, however, that Change of Control shall not include any intra-group restructuring

“Changzhou Liyuan” Changzhou Liyuan New Energy Technology Co., Ltd. (常州锂源新能源科技有限公司), a limited liability company established in the PRC and a direct non-wholly owned subsidiary of the Company

“Closing” the closing of the transaction contemplated under the Subscription Agreement

“Closing Date” the date of the Closing

“Company” Jiangsu Lopal Tech. Co., Ltd. (江蘇龍蟠科技股份有限公司), a joint stock company established in the PRC, the A shares of which are listed on the Shanghai Stock Exchange (SSE: 603906) and the H shares of which are listed on the Main Board of the Stock Exchange (HKEX: 2465)

“Director(s)” the director(s) of the Company

“Encumbrance” any charge, mortgage, pledge, lien, hypothecation, retention of title, security interest, easement, covenant, option, or voting trust agreement, or any other restriction on use, voting, transfer, or exercise of any other attribute of ownership; provided, however, that a right of first refusal shall not be construed as an Encumbrance

“Fair Market Value” the aggregate amount of the consideration that would be paid for all the target shares by a willing buyer in an arms-length transaction as of any date which will be determined by a valuer who is either an internationally recognized accounting firm or qualified international valuation firm to be mutually agreed by the Investor and LBM

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“Fully Diluted Basis” when used with respect to the issued and outstanding share capital of the Target Company, the total number of all capital stocks which are or would be issued and outstanding assuming the full exercise, conversion or exchange of any option, right, warrant or other security that is exercisable, convertible or exchangeable into capital stocks

“Group” the Company and its subsidiaries as at the date of this announcement

“IDR” the lawful currency of Indonesia

“Independent Third Party(ies)” third party(ies) independent of the Company and its connected persons (having the meaning ascribed to it under the Listing Rules)

“Indonesia Phase 1 Plant” the initial phase of the business of the Target Company, which shall consist of (i) the construction, operation and maintenance of a manufacturing facility for the process improvement and production of the cathode active materials for use in electric vehicle batteries, energy storage system, and other lithium battery products, (ii) the materials development and procurement, sale, distribution and otherwise commercialization of the cathode active materials, (iii) any other activities and businesses as mutually agreed to between the shareholders of the Target Company and (iv) other activities related and/or ancillary to the foregoing

“Investor” LG Energy Solution, Ltd., a corporation duly organized and validly existing under the Laws of the Republic of Korea

“Investor Shares Price” as of the Relevant Date, the Fair Market Value of the Target Company divided by the total number of issued and outstanding shares of the Target Company

“IPO” an initial public offering of a company’s shares on the Singapore Exchange Securities Trading Limited or any other internationally recognised stock exchange

“IRR” the annual, compounded internal rate of return achieved from the Closing Date until the date of payment for the Subscription Shares, calculated without reduction for any taxes imposed thereon

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“LBM”
LBM New Energy (AP) Pte. Ltd. (formerly known as Lopal Tech Singapore Pte. Ltd.), a private company limited by shares incorporated in Singapore and an indirect non-wholly owned subsidiary of the Company

“LBM Singapore”
LBM New Energy Singapore Pte. Ltd., an indirect non-wholly owned subsidiary of the Company which is wholly-owned by LBM

“Listing Rules”
the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

“Long-Stop Date”
the close of business on the date falling six (6) months from the date of Subscription Agreement (or such other later date as the parties to the Subscription Agreement may agree)

“Losses”
any and all claims, Liabilities, damages, fines, penalties, losses, diminution in value, loss of profits, costs and expenses (including amounts paid in settlement, interest, court costs and reasonable attorneys’ fees, and including any costs and expenses of remediation obligations)

“Material Adverse Effect”
means any fact, effect, event, circumstance, change or development which, alone or together with any other such effect, event, circumstance or development, materially and adversely affects, or would reasonably be expected to materially and adversely affect, the business, operations, prospects, condition (financial or otherwise) and results of operation of the Target Company, taken as a whole, or materially impairs, or would reasonably be expected to impair, ability of any parties to the Subscription Agreement to perform its obligations or consummate the transactions contemplated under the Subscription Agreement

“Qualifying IPO”
an IPO of LBM that takes place at a time prior to the completion of an IPO of the Target Company

“Qualifying Pre-IPO Shares”
the number of shares of LBM to be issued by the LBM and to be subscribed by the Investor as a result of exercise of the IPO Subscription Right by the Investor

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“Qualifying Pre-IPO Shares Price” as of the Relevant Date, the Fair Market Value of the LBM divided by the total number of issued and outstanding shares of the LBM

“Put Options” the FEOC Put Option and the Change of Control Put Option

“Relevant Date” the date of delivering a written notice in accordance with the Side Letter Agreement to require the LBM to issue Qualifying Pre-IPO Shares to the Investor in connection with the IPO Subscription Right

“Shareholder(s)” the shareholder(s) of the Company

“Shareholders Agreement” the shareholders agreement dated February 21, 2025 entered into among LBM, the Target Company and the Investor, which will take effect on and from the Closing Date

“Side Letter Agreement” the side letter agreement dated February 21, 2025 entered into among the Company, Changzhou Liyuan, LBM, the Target Company and the Investor

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“Subscription” the allotment and issuance of Subscription Shares by the Target Company to Investor in accordance with the terms and conditions of the Subscription Agreement

“Subscription Agreement” the subscription agreement dated February 21, 2025 entered into among LBM, the Target Company and the Investor in connection with the subscription of Subscription Shares by the Investor

“Target Company” PT LBM Energi Baru Indonesia, a foreign investment company established under the laws of the Republic of Indonesia in February 2023, an indirect non-wholly owned subsidiary of the Company which is directly wholly-owned by the Target Company

“Target Group” the Target Company and its subsidiaries

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“Target Shares” the common stock, par value of IDR1,000,000 per share, of the Target Company

“Transaction Documents” collectively, the Subscription Agreement, the Shareholders Agreement and the Side Letter Agreement

By order of the Board
Jiangsu Lopal Tech. Co., Ltd.
SHI Junfeng
Chairman

Nanjing, PRC
February 21, 2025

As at the date of this announcement, the Board comprises Mr. SHI Junfeng, Mr. LU Zhenya, Mr. QIN Jian, Mr. SHEN Zhiyong and Mr. ZHANG Yi as executive directors; Ms. ZHU Xianglan as non-executive director; and Mr. LI Qingwen, Mr. YE Xin, Ms. GENG Chengxuan and Mr. HONG Kam Le as independent non-executive directors.

AI assistant

Jiangsu Lopal Tech. Group Co., Ltd. — Capital/Financing Update 2025

50611_rns_2025-02-21_6fe6e6fa-fe31-4446-a254-ba546482bf35.pdf

Jiangsu Lopal Tech. Co., Ltd.

MAJOR TRANSACTION

IN RELATION TO PUT OPTIONS

THE SUBSCRIPTION

PUT OPTIONS AND PHASE 1 PUT OPTION

LISTING RULES IMPLICATIONS

THE EGM

DESPATCH OF CIRCULAR

THE SUBSCRIPTION AGREEMENT

Principal Terms of the Subscription Agreement

Date

Parties

Subscription

Subscription Price

Use of Proceeds

Conditions Precedent

Closing

SHAREHOLDING STRUCTURE OF THE TARGET COMPANY

SHAREHOLDERS AGREEMENT

Date

Parties to the Shareholders Agreement

Shareholders’ Rights and Obligations

Pre-emptive right, right of first refusal and tag-along rights

Rights in relation to Phase 1 and Phase 2 of the Business

Phase 1

Phase 2

Transfer Restrictions

Right of Appointment

Put Options

FEOC

Chang of Control

Termination of the Shareholders Agreement

Termination Attributable to LBM or the Target Company

LBM

LISTING RULES IMPLICATIONS

THE EGM

DESPATCH OF CIRCULAR

DEFINITIONS

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Jiangsu Lopal Tech. Group Co., Ltd. Capital/Financing Update 2025