Ningbo Joyson Electronic Corp. (SHSE: 600699) has announced that Xingyin Financial Assets Investment Co., Ltd. (referred to as "Xingyin Investment") and China Post Financial Assets Investment Co., Ltd. (referred to as "China Post Investment") will contribute 500 million yuan and 1 billion yuan, respectively, to the company's controlling subsidiary, Anhui Joyson Automotive Safety Systems Holdings Co., Ltd. (referred to as "Anhui Joyson Safety").
Upon completion of the capital increase, Xingyin Investment and China Post Investment will hold approximately 2.1459% and 4.2918% of Anhui Joyson Safety's equity, respectively, while Anhui Joyson Safety will remain a controlling subsidiary of the company.
The funds from this capital increase will primarily be used to repay shareholder loans provided by the company, which in turn will allow the company to pay down its own existing bank debt. This strategy is designed to reduce the overall debt burden, decrease interest expenses, and help optimize the capital structure of the controlling subsidiary, Anhui Joyson Safety, as well as the company's overall debt profile.
The move is aimed at achieving the company's target of reducing its total asset-liability ratio to below 60% as soon as possible. This initiative is expected to further enhance the company's overall operational resilience and sustained profitability.