Recently, Hangzhou Power Equipment Manufacturing Co., Ltd.（hereinafter referred as ”Equipment Manufacturing Co., Ltd.”）completed their diversity of equities reform.
The diversity of equities reform project of Equipment Manufacturing Co., Ltd was listed on the Hangzhou Equity Exchange. Hangzhou State-owned Capital Investment and Operation Co., Ltd. (hereinafter referred as "Hangzhou Capital") and Hangzhou Fenhua Investment Partnership (L.P.) (hereinafter referred as "Hangzhou Fenhua"), as participants in the reform of Equipment Manufacturing Co., Ltd., entered into an agreement regarding capital increase with Zhejiang Dayou Group Co., Ltd. ((hereinafter referred as "Dayou") and the Equipment Manufacturing Co., Ltd. Hangzhou Capital and Hangzhou Fenhua jointly increased the registered capital of Equipment Manufacturing Co., Ltd. in an amount of approximately RMB 2.676 billion. The increase capital fee for the diversity of equities reform project has been fully paid up and in December 2020, Equipment Manufacturing Co., Ltd. completed all the industrial and commercial registration procedures.
Established in November 2018, Hangzhou Capital is a wholly State-owned capital investment and operation company at the first municipal-level in Hangzhou. Hangzhou Capital is mainly positioned to assist the State-owned Assets Supervision and Administration Commission of Hangzhou Municipality in performing their responsibilities as an investor. It carried out the operation of State-owned capital investment, thereby implementing the strategic adjustment of State-owned capital.
Established in May 2018, Hangzhou Fenhua is the largest captive fund under the "Operation Phoenix" of Zhejiang Province and is fully funded in an amount of over RMB 25 billion. Hangzhou Fenhua is primarily positioned to support the listing of outstanding enterprises in Zhejiang Province and the M&A and reorganization of listed enterprises.
Equipment Manufacturing Co., Ltd was established in May 2005, and has eight branches. It is a wholly-owned subsidiary of Zhejiang Dayou Group Co., Ltd., which is the largest switchgear manufacturer in the electrical power system of Zhejiang Province. Equipment Manufacturing Co., Ltd is engaged in producing over 40 different types of products in eight categories, including XIRIA, centrally installed switchgear, compact substations, low voltage switchgear and electrical boxes. It is the largest cooperation partner of Schneider Electric SA in the Asia- Pacific region, and has several indices, such as the ISO9001 Quality Management System Certification, ISO 14001 Environmental Management System Certification, ISO 18001 Occupational Health and Safety System Certification, Measurement Management System Certification, National 3C Certification and CECC Certification.
After completing the diversity of equities reform, Equipment Manufacturing Co., Ltd will integrate the capital in the power industry and State-owned capital. It will seek to establish an enterprise management system featuring diversified equities, market-oriented mechanisms and modern governance, so as to fully unleash the vitality of enterprises for their development.
JunHe represented Zhejiang Dayou Group Co., Ltd. in conducting its legal due diligence on the diversity of equities reform. It undertook proposal design, drafted the transaction documents and participated in multiple rounds of negotiations. JunHe provided legal services in respect of the promotion of strategic cooperation among all parties as well as providing opinions and suggestions with respect to the relevant legal issues.