Huayou Cobalt Plans to Issue Convertible Bond to Invest in Ternary Cathode Materials

In late June, Huayou Cobalt released a plan of issuing convertible bond in A-share market, i.e. the Company plans to publicly issue convertible bond in A-share market to raise funds totaling no more than RMB 7.6 billion (inclusive); after deducting issuing expenses, the Company plans to: a) invest RMB 4.6 billion in integrated project of annually producing 50000 tons of high-nickel power battery ternary cathode materials and 100000 tons of ternary precursor materials; b) invest RMB 1 billion in project of annually producing 50000 tons of high-performance precursors of ternary cathode materials; c) invest RMB 2 billion as working capital supplement. In addition, Huayou Cobalt made announcement that it plans to trust its wholly-owned subsidiary, Guangxi B&M Science and Technology Co., Ltd. with the investment and construction of the integrated project of annually producing 50000 tons of high-nickel power battery ternary cathode materials and 100000 tons of ternary precursor materials. According to information, this project mainly consists of three parts: high-purity battery-grade nickel sulfate production line with annual capacity of 50000 tons (amount of metal); production line of high-nickel power-battery-oriented ternary precursor materials with annual capacity of 100000 tons; and production line of high-nickel power-battery-oriented ternary cathode materials with annual capacity of 50000 tons. It takes two years to complete constructions. Preliminarily, total investment in the construction is RMB 6.308 billion. Specifically, construction investment is RMB 5.437 billion, interest incurred during construction is RMB 181 million and initial working capital is RMB 690 million.