Chinese battery manufacturer GEM (SHE:002340) agreed to dispose of part of its non-ferrous metal manufacturing arm to its South Korean counterpart, EcoPro (KOSDAQ:086520), through their subsidiaries.

Industrial battery maker EcoPro Materials (KRX:450080) will buy 29% of Green Eco Nickel or GEN from GEM Hong Kong International for $37.5 million. The parent EcoPro will own 1% of GEN, while EcoPro Materials will hold 28%, according to a Shenzhen Stock Exchange filing on Jan. 2.

EcoPro will provide a $159.8 million loan to GEN, repaying the $81.2 million it owes to GEM HK and another shareholder, New Horizon International Holding, before the completion of the transaction.

After the transaction, GEM's holdings in GEN will drop to 29% from 58%, with GEM HK owning 5.8%. GEN will no longer be a part of GEM's consolidated financial statements.

Even after the transaction, GEM will continue to bear 20% of GEN's financing obligations and loans, which is worth $56 million, the filing added.

EcoPro's shares jumped less than 5% and EcoPro Materials' shares rose less than 6% in recent trade.