On June 24th, GeLongHui announced that Shenma Industrial (600810.SH) held 61.7905% equity of Henan Shenma Nylon Chemical Co., Ltd. (referred to as "Nylon Chemical"), and 100% equity of Pingdingshan Shenma Engineering Plastics Co., Ltd. (referred to as "Engineering Plastics"). Nylon Chemical and Engineering Plastics are both subsidiaries of Shenma Industrial. Engineering Plastics was restructured from the original Chemical Plant Three under Nylon Chemical in 1995. Due to historical reasons, Nylon Chemical and Engineering Plastics are located in the same factory area and there is a phenomenon of "factory within a factory" between the two companies.
In order to streamline management, improve operation efficiency, eliminate the phenomenon of "factory within a factory", and facilitate safety management, the company's holding subsidiary, Nylon Chemical, intends to cash purchase the 100% equity of Engineering Plastics held by the company based on the evaluation result of the asset appraisal report issued by the evaluation institution and filed by the state-owned asset supervision and administration authority. After the completion of this transaction, Engineering Plastics will become a wholly-owned subsidiary of Nylon Chemical, and Nylon Chemical will absorb and merge Engineering Plastics according to the legal procedures after the completion of the acquisition.