The 29th meeting of the fourth board of directors of Hainan Rubber was held on July 18 and approved the Proposal for Controlling Shareholder to Commit on Resolving Potential Peer Competition.
HSF (S) Pte. Ltd., a wholly-owned subsidiary of Hainan State Farm Investment and Holdings Group, purchased a 45% stake in Indonesian natural rubber company PT. Kirana Megatara and a 62.5% stake in Singapore-based natural rubber trader Archipelago Rubber Trading Pte. Ltd..
The two deals may result in potential peer competition between Hainan State Farm Investment and Holdings Group and Hainan Rubber.
To solve the issue, Hainan State Farm Investment and Holdings Group made four commitments:
First, within 30 months since the issuance of the commitment, it will give priority to transfer all stakes hold by its wholly-owned subsidiary, HSF (S) Pte. Ltd., in KM and ART to Hainan Rubber.
Second, if Hainan Rubber exercises the pre-emptive right, but cannot complete the share transfer deal for failing to get the administrative approval, Hainan State Farm Investment and Holdings Group promises to transfer all stakes in KM and ART to a non-affiliated third party within 30 months from the date of confirmation that the equity transfer transaction cannot be completed.
Third, if Hainan Rubber gives up the pre-emptive right, Hainan State Farm Investment and Holdings Group promises to transfer all stakes in KM and ART to a non-affiliated third party within 30 months from the date on which it waives the pre-emptive right.
Fourth, before Hainan State Farm Investment and Holdings Group transfers all stakes in KM and ART, they agree to entrust these stakes to Hainan Rubber for management.
