To enhance the company's core competitiveness and profitability, Lizhong Group Co., Ltd. (hereinafter referred to as "the Company") plans to issue convertible corporate bonds to unspecified targets. The Board of Directors has analyzed the necessity and feasibility of using the raised funds for the issuance of convertible corporate bonds as follows:
I. Plan for the Use of Raised Funds
The total amount of funds to be raised from the issuance of convertible corporate bonds shall not exceed RMB 11,800.00 million (inclusive). After deducting issuance expenses, the funds will be used for the following projects:
| No. | Project Name | Total Project Investment (RMB million) | Amount of Raised Funds to be Invested (RMB million) |
|---|---|---|---|
| 1 | Project for the Annual Production of 3 Million Ultra-light Aluminum Alloy Wheels and 180,000 Forged Commercial Vehicle Wheels | 105,000.00 | 45,000.00 |
| 2 | Project for the Upgrade and Energy-saving Renovation of Annual Production of 2 Million Lightweight Cast-spun Aluminum Alloy Wheels | 51,723.00 | 43,000.00 |
| 3 | Expansion and Renovation Project for Microcrystalline Silicon-Aluminum Composite New Materials and Precision Components | 11,100.00 | 10,000.00 |
| 4 | R&D Project for High-end Special Intermediate Alloys | 3,229.00 | 3,000.00 |
| 5 | Supplementary Working Capital Project | 17,000.00 | 17,000.00 |
| Total | 188,052.00 | 118,000.00 |
The portion of the total project investment exceeding the planned raised funds will be self-financed by the Company. The portion of the net proceeds from the issuance of convertible corporate bonds, after deducting issuance expenses, that is lower than the total planned investment for the above projects will be self-financed by the Company. Prior to the availability of the raised funds from the issuance of convertible corporate bonds, the Company will make advance investments with its own funds based on the actual progress of the projects and will reimburse them upon the availability of the raised funds.
II. Analysis of the Necessity and Feasibility of the Raised Fund Investment Projects
(I) Project for the Annual Production of 3 Million Ultra-light Aluminum Alloy Wheels and 180,000 Forged Commercial Vehicle Wheels
- Project Background
This project will be implemented by the Company's subsidiary, Xintai Wheel Manufacturing Co., Ltd. (hereinafter referred to as "Xintai Wheel"). The total investment is RMB 105,000.00 million, of which RMB 45,000.00 million is planned to be raised from the issuance. The project will be located in the Sino-Thai Rayong Industrial Park in Thailand. Upon completion, it will add an annual production capacity of 3 million ultra-light cast-spun aluminum alloy wheels and 180,000 forged commercial aluminum alloy wheels.
- Necessity of Project Implementation
(1) Responding to Global Trade Changes and Building a Global Risk Buffer System