Plans to divest lighting business! Feilo Acoustics intends to list and transfer 100% equity of Feilo Investment
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On February 22, Feilo Acoustics, one of the "Old Eight Stocks," announced that it plans to sell its 100% equity stake in Feilo Investment through public listing and transfer on the Shanghai United Assets and Equity Exchange.
The listing transaction conditions require the delisting party to assume joint and several guarantee liability for Feile Investment's full debts to Feile Acoustics and its bank liabilities, and to provide corresponding asset guarantees. This transaction constitutes a major asset restructuring.
China Light Network notes that Feile Investment is the management platform for Feile Acoustics' lighting business, and this transaction indicates that the listed company intends to divest its lighting business. However, the buyer and price for this transaction have not yet been determined, facing the risk of potential suspension, termination, or cancellation.
Some operational aspects of the LED general lighting business are underperforming
According to the divestment plan, Feilo Acoustics' core businesses include three major segments: smart hardware products, solutions, and inspection and testing. Among these, the smart hardware segment covers automotive lighting, body control, module packaging, chip testing services, and smart lighting; the solutions segment covers smart water management, intelligent manufacturing, and industrial internet security. The company is committed to becoming a leading provider of smart hardware and industrial intelligence solutions.
Feilo Investment centers on the Sylvania Group, with core businesses in wholesale and retail of light sources and luminaires, as well as lighting engineering channel projects. Through its three distinctive brands—Sylvania, Lumiance, and Concord—it focuses on different market segments.
It is further reported that, due to Feilo Acoustics' strategic adjustment, on January 28, 2022, the Board of Directors reviewed and approved the relevant matters concerning the gratuitous transfer of 100% equity interests in its wholly-owned subsidiaries Yaming Lighting and Feilo Construction to its wholly-owned subsidiary Feilo Investment. Upon completion of this transfer, Feilo Investment will hold 100% equity interests in Yaming Lighting and Feilo Construction, becoming the management platform for Feilo Acoustics' lighting business.
Feilo Acoustics stated that in recent years, Feilo Investment, Yaming Lighting, and Feilo Construction have performed poorly and remained in a state of continuous losses, significantly dragging down the company's overall business development.
Through this transaction, Feilo Acoustics can divest its loss-making lighting business, thereby enhancing the company's going concern capability. This is conducive to improving asset quality and financial condition, promoting business upgrading and transformation, further optimizing the asset structure, strengthening core competitiveness, and achieving sustainable development. Upon completion of this transaction, Feilo Acoustics will concentrate resources to strive to enhance its sustainable operating capability and profitability, optimize asset quality, increase corporate value, and safeguard the interests of minority shareholders.
The sale proposal mentions that, through this transaction, Feilo Audio will divest assets with poor operating performance and is expected to achieve a certain amount of capital recovery.
Data shows that from January to September 2021, the net profit attributable to shareholders of Feile Investment, Yaming Lighting, and Feile Construction were -165 million yuan, -28.8118 million yuan, and 19,700 yuan respectively; in 2020, all three companies reported losses in net profit attributable to shareholders, amounting to -211 million yuan, -77.7817 million yuan, and -4.5463 million yuan respectively.
It is reported that Feile Investment has experienced poor operating performance in recent years, mainly due to the combined impact of the slowdown in the global general lighting industry and the continuous spread of the COVID-19 pandemic both domestically and internationally. Some enterprises invested in by Feile Investment have faced issues such as declining business, which has significantly dragged down the overall operational development of the listed company Feilo Acoustics.
Before and after this transaction, the controlling shareholder of the company remains INESA Electronics Group, and the actual controller remains INESA Group. This transaction did not result in any change in the control of the listed company.
In addition, China Lighting Network has noted that in the past three years, Feilo Acoustics has undergone several major asset restructuring scenarios, such as listing for sale 100% equity of Beijing Shen'an, transferring 70,337,623 shares of Huaxin Stock held through non-public agreements, and issuing shares to purchase assets while raising matching funds (Feilo Acoustics issued shares to INESA Group, Lingang Sci-Tech Investment, and Shanghai Huayi to purchase their 100% equity holdings in SIIP; issued shares to INESA Electronics Group to purchase its 100% equity holding in INESA Automotive Electronics; and issued shares to INESA Electronics Group, Shanghai United Assets, Changfeng Industrial, Fuxin Communication, Quyou Network, and 19 natural persons including Hong Bin to purchase their 100% equity holdings in INESA Smart Electronics, etc.).