Stock Code: 000553 (200553) Stock Abbreviation: ADAMA A(B) Announcement No. 2021-24
ADAMA Ltd.
Announcement on theSigning of a Waiver Agreement to the Equity
Purchase Agreement
The Company and all members of the Company’s Board of Directors confirm that all
information disclosed herein is true, accurate and complete, with no false or
misleading statement or material omission.
I. Overview of the Transaction
On October 28, 2020, the 27th Meeting of the 8th session of the Board of
Directors of ADAMA Ltd. (the “Company”) approved the Acquisition of 51% Equity
Stake in Jiangsu Kelinong Agrochemical Co., Ltd., and 1% Equity Stake in Shanghai
Dibai Plant Protection Co., Ltd. On the same day, the Company and Jiangsu Huifeng
Agrochemical Co., Ltd. (“Huifeng”, together with the Company as the “Parties”)
entered into an Equity Purchase Agreement (the “EPA”) in which the Company
intends to purchase 51% equity interests of Jiangsu Kelinong Agrochemical Co., Ltd.
(as of the date of this announcement, Jiangsu Kelinong Agrochemical Co., Ltd. has
already amended its name to ADAMA Huifeng (Jiangsu) Co., Ltd. (the “NewCo.”)),
subsequent and subject to the full satisfaction of the conditions precedent under the
EPA(the “NewCo. Transaction”); further, on December 28, 2020 and March 30, 2021,
the Company and Huifeng entered into two supplemental agreements to the EPA
respectively (collectively as the “Supplemental Agreements”).
For details, please see the Announcement on the Resolutions of the 27th meeting
of the 8th session of the Board (announcement No. 2020-56), the Announcement on
the Acquisition of 51% Equity Interests in Jiangsu Kelinong Agrochemical Co., Ltd.
and 1% Equity Interests in Shanghai Dibai Plant Protection Co., Ltd. (announcement
No. 2020-59), the Announcement on Signing the Supplemental Agreement to the
Equity Purchase Agreement (announcement No. 2020-75) and the Announcement on
Signing the Supplemental Agreement II to the Equity Purchase Agreement
(announcement No. 2021-9) which were disclosed by the Company on the website
www.cninfo.com.cn separately on October 29, 2020, December 29, 2020 and March
31, 2021.
On May 28, 2021, the Company and Huifeng executed an Agreement on Waiver
and Supplemental Conditions Precedent, (the “Waiver Agreement”) according to
which the Company intends to provide a conditional waiver regarding certain
conditions precedent under the EPA, and as a condition to granting such waivers, the
Company and Huifeng intend to include certain supplemental conditions and/or
requirements under the EPA.
II．Key Terms of the Waiver Agreement
According to EPA, material closing precedents are as follows: 1. the
restructuring has been completed; 2. relevant approval of in relation to this NewCo.
Transaction has been duly obtained and the appraisal report has been duly filed with
government entities; 3. required government review from the perspective of anti-trust
law shall be completed; 4. official resumption of production activities in a full scale in
relation to certain production lines and related facilities and equipment.
With respect to condition precedents aforesaid, material waivers to the closing
conditions and the addition condition precedents are as follows:
1、The Company agrees to partially waive requirements for full completion of
restructuring on license and permits, provided that the Parties agree these waived
requirements shall be completed after the closing if necessary. The material license
and permits to be waived include: completion of change of registration to certain
pesticide registration certificates, completion of transfer of firefighting permits to
certain buildings, completion of change of the pesticide production permits with
additional scope.
2、The Company agrees to partially waive requirements for full completion of
production resumption or rectification, provided that the Parties agree additional
holdback payments (approximate RMB 31 million) shall be held by the Company
until satisfaction of the required production resumption or rectification.
3、The Company agrees to partially waive the requirement on adverse
proceedings at closing, provided that the Parties agree additional holdback payment
(approximate RMB 123 million) shall be held by the Company. The adverse
proceedings shall include: relevant disputes in relation to the Glufosinate are fully and
finally resolved in a way that does not cause, nor will cause, an adverse effect to the
Company, the Company’s indemnified party and/or the NewCo.; actual production
volume of the Glufosinate active ingredients meeting or exceeding 417MT per month.
The holdback payment in relation to the adverse proceedings will not be released until
fully settlement of the above adverse proceedings. The Parties agree that, if the
Company purchase additional equity interest of the Company with a price higher than
the value det
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