Chinese electric-bus maker completes US$20m investment in Dragon Group unit

STRUGGLING electronics engineering firm Dragon Group International said on Monday night that Chinese electric-bus manufacturer Zhuhai Yinlong Energy (YLE) has completed its US$20 million share subscription in Dragon's unit EoCell as of May 20.

YLE subscribed for nearly a billion shares of EoCell, representing 40 per cent of EoCell's new enlarged share capital, Dragon said in an exchange filing.

Meanwhile, KSMC, the Hong Kong-incorporated company representing the key management of EoCell, has also subscribed for close to half a billion EoCell shares representing about 20 per cent of the enlarged EoCell share capital.

Dragon did not disclose KSMC's subscription price in its Monday filing. It had said in January that KSMC will pay a nominal consideration for the shares.

As of May 20, Dragon owns 40 per cent of the EoCell enlarged share capital. It previously held a 93 per cent stake.

EoCell is a joint venture between Dragon and Sputnik Energy, formed in 2015 to explore opportunities in the lithium ion batteries and energy storage market.

YLE's investment comes under a new share subscription agreement entered into on January 3.

The original proposed subscription of shares by YLE and Sputnik Energy, first announced in 2017, was not fulfilled and/or waived before the long-stop date of April 2018, so the agreements were terminated. 

Dragon Group International was placed on the Singapore Exchange's watch list on March 4, 2015 and will be required to delist from the mainboard after it failed to meet the financial exit criteria before the stipulated deadline several times.

Trading in its securities ceased in May 2018 and remains suspended until the completion of its exit offer.