Lenovo Holdings: Sunshine Life Insurance plans to invest over 1.3 billion yuan to acquire a 39.90% stake in JunChuang International Financial Leasing

According to the Zhitong Finance APP, Legend Holdings (03396) announced that on November 1, 2024, the company and its indirect wholly-owned subsidiary JunChuang Group plan to sell 14.51% and 0.82% of the expanded registered capital of JunChuang International Financial Leasing Co., Ltd. (the target company) to Sunshine Life Insurance for approximately RMB 474 million and RMB 26.64043 million, respectively. Sunshine Life Insurance conditionally agreed to subscribe for approximately RMB 803 million of the newly increased registered capital of the target company, which is about RMB 721.5 million (approximately 24.57% of the expanded registered capital of the target company).

As of the date of this announcement, the target company is a subsidiary of the company, with JunChuang Group holding 71.07% of the equity in the target company, the company holding 19.24%, Shanghai Junqing holding 4.95%, Shanghai Junhai holding 3.84%, and Hainan Junyi holding 0.90%.

After the completion of the transfer and capital increase, the company will indirectly hold 52.79% of the equity in the target company through JunChuang Group, with Shanghai Junqing holding 3.73%, Shanghai Junhai holding 2.90%, Hainan Junyi holding 0.68%, and Sunshine Life Insurance holding 39.90%. The target company will still be a subsidiary of the company.

On November 1, 2024, the target company, the original shareholders, several subsidiaries of the target company, and Sunshine Life Insurance will also sign a shareholder agreement, stipulating the rights of the target company's shareholders. According to this agreement, if any repurchase event described in the "repurchase right" section of this announcement occurs, Sunshine Life Insurance has the right to request JunChuang Group, the company, and its designated entities recognized by Sunshine Life Insurance to repurchase all or part of the equity in the target company held by Sunshine Life Insurance at that time.

The announcement states that Sunshine Life Insurance is a leading domestic professional life insurance company, and its controlling shareholder, Sunshine Insurance Group Co., Ltd., is a large insurance group listed in Hong Kong, ranking among the top 500 enterprises in China. Through this strategic cooperation, not only can the governance structure of the target company be optimized and its capital strength enhanced, but it will also gain support from Sunshine Life Insurance in customer resources, sales channels, funding channels, and risk management, which is beneficial for the target company to enhance its overall competitiveness and profitability. At the same time, the transfer will further enrich the company's operating capital and cash flow, which is conducive to consolidating the company's financial and cash position. Therefore, the company believes that entering into the equity transfer and capital increase agreement and the shareholder agreement aligns with the company's strategic development direction and helps enhance shareholder value.

The proceeds from the transfer and capital increase are planned to be used for the daily operations of the company and the target company and/or to repay debts, and will be reallocated to other investment opportunities in a timely manner to better serve the group's strategic development