The consideration for this transaction is USD 31.92 million. The underlying asset involved is a 90,000 tpa lithium iron phosphate cathode plant under construction in Indonesia.
Upon completion of the transaction, KINETIQ will hold 76% of PT LBM, LBM (AP) will hold 23.99%, and LBM NEW ENERGY SINGAPORE PTE. LTD. (“LBM (SG)”), a wholly-owned subsidiary of LBM (AP), will hold 0.01%. PT LBM will no longer be consolidated into the Company’s financial statements.
Transaction Overview
The United States enacted the One, Big, Beautiful Bill Act in July 2025. Under the criteria for Prohibited Foreign Entities (PFE), any enterprise with more than 25% equity held by a single Chinese entity will be classified as a PFE. Downstream North American customers of such entities will be ineligible for 45X tax credits, drastically undermining competitiveness and blocking shipments to North America.
In recent years, the Company has signed long-term supply agreements with multiple leading overseas battery makers, primarily serving the North American market. Under PT LBM’s existing ownership structure, failure to restructure equity would result in a PFE designation, disrupting performance of existing long-term contracts, cutting off supplies to North American buyers and triggering massive idle capacity, which would harm the Company and all shareholders. To maintain stable supply to North American customers and protect the legitimate interests of all shareholders, especially minority shareholders, the Company proposes to restructure PT LBM’s equity to achieve Non-PFE status. This restructuring represents the best feasible solution to sustain North American supply under current U.S. policy constraints and is fully necessary and reasonable.
The proposal was approved at the 18th meeting of the 5th Board of Directors. On 22 October 2026, LBM (AP) signed a Share Purchase Agreement and a Shareholders’ Agreement with KINETIQ. KINETIQ will acquire the 76% stake held by LBM (AP) in cash for USD 31.92 million. Post-closing, KINETIQ holds 76%, LBM (AP) 23.99% and LBM (SG) 0.01%. PT LBM will be deconsolidated. Through this structure, the Company can recover most of its prior investment while retaining rights to future dividends from its PT LBM equity holding.
PT LBM is engaged in the R&D, production and sales of LFP cathode materials with a designed capacity of 90,000 tonnes per annum. The Company established PT LBM in February 2025 with an initial registered capital of 300 billion Indonesian rupiah. In December the same year, LBM (AP) injected an additional 720 billion Indonesian rupiah.
The Company stated that it has sealed multiple long-term supply contracts with top overseas battery manufacturers targeting North America. Without equity restructuring, PT LBM would be labelled a PFE, jeopardising long-contract fulfilment, halting North American deliveries and leaving capacity largely idle, to the detriment of the Company and its shareholders. Restructuring to obtain Non-PFE status is the optimal viable route to secure ongoing North American supply amid U.S. regulatory restrictions and is sufficiently justified.
