China Oriental (00581) announced that on October 16, 2024 (after the Hong Kong trading session), the company entered into agreements with its major shareholder, ArcelorMittal: (i) an upstream joint venture agreement, under which the company and/or ArcelorMittal conditionally agreed to establish an upstream joint venture to engage in the production of hot-rolled coil substrate and other products determined by the joint venture partners; and (ii) a downstream joint venture agreement, whereby the joint venture partners conditionally agreed to establish a downstream joint venture to engage in the production of new energy soft magnetic material products.
Upon the establishment of the joint venture companies, the company and ArcelorMittal will each hold 50% equity in each joint venture company. As of the date of this announcement, the company expects that the joint venture companies will not become subsidiaries of the company after their establishment, and their financial performance will not be consolidated into the company's financial statements at the group level.
New energy soft magnetic materials are a type of soft magnetic material with improved electromagnetic properties, belonging to the core materials of high-end downstream manufacturing in the steel industry, and have been used in core components of automotive electric machines and other electrical equipment.
