Xiamen Hongfa Electroacoustic Co., Ltd agreed to acquire WuHan LiNuo Solar Energy Group Co., Ltd. (SHSE: 600885) from Shandong Linuo New Material Co., Ltd. and other shareholders in a reverse merger transaction on October 13, 2011. WuHan LiNuo Solar Energy will exchange its entire assets and liabilities with a total of 75.01% stake in Xiamen Hongfa Electroacoustic Co., Ltd. held by Xiamen Youge Investment Co., Ltd., Lianfa Group Co., Ltd., and Jiangxi Electric Group Company. Youge Investment owns 42.41% stake in Xiamen Hongfa, Lianfa Group owns 20.56% stake, Jiangxi Electronic Group owns 12.03% stake in Xiamen Hongfa. The difference between the exchange-in and exchange-out assets will be paid by WuHan LiNuo Solar through issuance of shares to Xiamen Youge Investment Co., Ltd., Lianfa Group Co., Ltd., and Jiangxi Electric Group who will receive the exchange-out assets and subscribe the shares from WuHan LiNuo Solar according to their holding ration in the exchange-in assets. After receiving the exchange-out assets, Xiamen Youge Investment, Lianfa Group, and Jiangxi Electric Group plan to transfer the exchange-out assets to Jinan Linuo Glasswork and the assets will be directly transferred to Jinan Linuo Glasswork Co., Ltd. by WuHan LiNuo Solar.

The transaction price of the exchange-in asset is CNY 2.4 billion, the transaction price of the exchange out asset is CNY 9.8 million. WuHan LiNuo Solar Energy Group Co., Ltd. will issue approximately 322.9 million shares. Among which, it will issue 182.58 million shares to Xiamen Youge Investment, 88.52 million shares to Lianfa Group, and 51.79 million shares to Jiangxi Electric Group, which amounts to 38.31%, 18.57%, and 10.87% of the expanded capital respectively. The shares subscribed by Xiamen Youge Investment and Jiangxi Electric will have a lock-up period of 36 months upon the end of the issuance, while the shares subscribed by Lianfa Group will have a lock-up period of 12 months upon the end of the issuance, and upon completion of this 12 month lock-up period, it should not sell more than 80% of this subscription within 24 months. The transaction is subject to the approval of China Securities Regulatory Commission. The transaction was approved by the Board of Wuhan Linuo on October 13, 2011 and by the shareholders of Wuhan Linuo November 28, 2011. On July 17, 2012, China Securities Regulatory Commission approved the transaction. Xiamen Youge Investment Co., Ltd. received the approval for exemption to tender offer obligations. As on November 28, 2011, transaction was approved by shareholders of Hongfa Technology.

Southwest Securities Co., Ltd. acted as financial advisor while Tianyuan Law Firm acted as legal advisor for WuHan LiNuo Solar. BDO China Lixin Dahua Certified Public Accountants Co., Ltd. acted as incoming assets auditing firm and Zhonghuan Haihua Certified Public Accountants Co., Ltd. acted as outgoing assets auditing firm in the transaction.

Xiamen Hongfa Electroacoustic Co., Ltd completed the acquisition of acquire WuHan LiNuo Solar Energy Group Co., Ltd. (SHSE: 600885) from Shandong Linuo New Material Co., Ltd. and other shareholders in a reverse merger transaction on October 19, 2012.