Core Viewpoint - Sichuan Changhong Electric Co., Ltd. plans to privatize its subsidiary, Changhong Jiahua Holdings Limited, through a scheme proposed by its controlling shareholder, Changhong Electronics Holding Group Co., Ltd. This move aims to enhance operational efficiency and reduce costs associated with being publicly listed [2][7]. Summary by Sections Privatization Overview - Changhong Jiahua, a significant subsidiary of Sichuan Changhong, will be privatized by its controlling shareholder's wholly-owned subsidiary, Hongtu Investment Co., Ltd. The plan involves acquiring all issued ordinary shares of Changhong Jiahua, excluding those controlled by Sichuan Changhong, leading to the delisting of Changhong Jiahua from the Hong Kong Stock Exchange [2][5]. - The privatization plan has received a no-objection letter from the Hong Kong Securities and Futures Commission [2][6]. Financial and Shareholding Structure - As of now, Changhong Jiahua has issued 1,454,652,000 ordinary shares and 1,115,868,000 convertible preferred shares. Sichuan Changhong indirectly holds 874,650,000 ordinary shares, representing 60.13% of the total ordinary shares [5]. - The privatization will involve the acquisition of 580,002,000 ordinary shares from other shareholders, which constitutes approximately 39.87% of Changhong Jiahua's ordinary shares and 22.57% of its total issued shares [5][7]. Impact on Company and Subsidiary - The privatization is expected to have no significant impact on the financial status or operations of Sichuan Changhong, as its ownership percentage in Changhong Jiahua will remain unchanged [7]. - The long-term underperformance of Changhong Jiahua's stock price has hindered its ability to leverage the Hong Kong stock market for capital operations, making privatization a strategic move to reduce listing costs and explore new growth opportunities [7][9]. Board Approval and Procedures - The privatization proposal was approved by the board of directors during the 36th meeting of the 12th board session, with a voting outcome of 4 in favor and 5 abstentions [19][20]. - The board's decision does not require shareholder approval as per the company's articles of association [14]. Future Arrangements - Following the completion of the privatization, Hongtu Investment will become a minority shareholder of Changhong Jiahua, and the company will continue to provide necessary financial support as per regulatory requirements [10][12].