Recon Technology has agreed to acquire 43% stake in Future Gas Station, (FGS), a service company focusing on providing new technical applications and data operations to gas stations of oil companies.
Recon, through its affiliates Beijing BHD Petroleum Technology and Nanjing Recon Technology has entered into a nonbinding framework agreement with Future Gas Station.
After entry into binding purchase agreement, Recon will pay cash and issue restricted shares to FGS and its shareholders in return for the issuance of new shares from FGS and the transfer of shares from existing FGS shareholders.
As previously disclosed in a press release on December 18, 2017, the Company invested RMB 4.35 million (approximately $0.7 million) in FGS to own 8% of FGS through its affiliates Beijing BHD Petroleum Technology Co., Ltd. and Nanjing Recon Technology Co., Ltd.
Pursuant to the Framework Agreement, Recon intends to increase its affiliates’ interest from 8% to 43% of FGS’ equity. Upon entry into a definitive purchase agreement, Recon expects to pay an aggregate of RMB 10 million and RMB 33.3 million worth of Recon’s restricted shares to FGS and its shareholders. This transaction and determination of share price are subject to entry into a definitive purchase agreement, board approval of such agreement and satisfaction of customary closing conditions.
Mr. Shenping Yin, CEO of Recon Technology, Ltd commented, “We are very pleased with the progress that the FGS has shown since our initial investment in December 2017. We continue to view FGS as an innovator transforming the customer experience at retail gas stations in China. And foremost, we are highly confident in FGS’ founders and the professionalism of the team. They have valuable insights into domestic gas station markets and have great capability of solution implementation. While we understand that FGS will continue to require significant capital investment over the short term, we hope our next investment will help FGS enter its next stage of expansion of its smart gas station offerings.”
Mr. Yang Song, the founder of FGS, said, “We are glad that Recon has shown continued faith in our operations and expansion. After one-year’s exploration and practices, we believe we have accumulated sufficient data to further improve our operation and enable us to launch larger scale deployment of our terminals and new retail solutions. It will always be our philosophy to provide safe, convenient and various choices for consumers. We hope to continue to improve the operating efficiency, marketing efficiency, client retention, repurchase rates, and employee satisfaction of gas stations through our mobile applications, smart vending machines and other additions to the gas station retail experience.”
Source: Company Press Release