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LIZHONG Wheel Group Ltd said its wholly owned unit, Tianjin Lizhong Wheel Co Ltd, had entered into a sale and purchase agreement on June 5 to acquire a 60 per cent stake in Baotou Shengtai Automobile Accessories Manufacturing Co Ltd for 48 million yuan (S$10.4 million).
Baotou manufactures and sells aluminium alloy automobile wheels and accessories. The seller of the stake, Wang Xue, is a Chinese citizen and the sole shareholder and the legal representative of Baotou. He is not related to Lizhong, its directors or its executive management.
"The acquisition is in the company's ordinary course of business which includes the designing, manufacturing and sale of aluminum alloy wheels in the PRC," Lizhong said in a filing on Friday.
"It is also in line with the group's stated intention to build the group's presence and investment in the region through a selective positioning, new investments with a view to broaden the revenue stream of the group and facilitate sustained profitability for the group moving forward."