Huizhou Highpower Technology has entered into an agreement to acquire up to 50% equity interest in Huizhou Yipeng Energy Technology, an electric vehicle power battery system solutions provider.

Huizhou Highpower Technology is a completely owned subsidiary of Highpower International, a developer of lithium and nickel-metal hydride (Ni-MH) rechargeable batteries, while Huizhou Yipeng Energy Technology specialises in the plug-in hybrid electric vehicle (PHEV) and electric vehicle (EV) bus market in China.

Highpower International will invest CNY114.75m ($17.3m), consisting of a total of $5.2m in cash and $12.1m of power battery equipment into Huizhou Yipeng for a 50% equity interest.

"Highpower International will invest CNY114.75m ($17.3m), consisting of a total of $5.2m in cash and $12.1m of power battery equipment into Huizhou Yipeng for a 50% equity interest."

This month, it made the first purchase of  30.4% for CNY15m in cash ($2.3m) and power equipment equivalent to CNY45m ($6.8m).

The acquisition of the remaining equity interest of 14.6% for CNY19.75m in cash ($2.9m) and power equipment equivalent to CNY35m ($5.3m) is expected to complete before 5 November.

Highpower intends to fund the equity purchase with cash on hand, expected future cash flow, and if required around $2m in borrowings under existing credit arrangements.