Borqs send letter to shareholders regarding divestment of solar subsidiary

Borq Technologies CEO Pat Chan wrote the following letter to shareholders. "The purpose of this letter is to help clarify the proposed divestment of our company’s ownership in Holu Hou Energy and the implications that this transaction may have to Borqs and our shareholders… As we have stated in prior press releases, the Committee on Foreign Investment in the United States has notified our company by a letter dated December 13, 2022, that CFIUS has identified risks to US national security arising as a result of Borqs’s investment in HHE… In efforts to address the national security concerns of CFIUS, we have signed a National Security Agreement with CFIUS identifying all the steps that Borqs shall take in order to completely remove Borqs’ involvement with HHE, including the transfer of our ownership in HHE into a Divestment Trust which is now under the supervision of an independent trustee…. Since Borqs’ financial support of HHE, which began with the acquisition of HHE in October 2021, HHE has signed multiple contracts with customers in Hawaii for the deployment of HHE’s solar energy plus storage system and EnergyShare technology for Multi-Dwelling Residential Units such as the recently announced Lendlease Island Palm Communities in Honolulu for large military personnel housing compounds. Installations for these projects are to begin this summer and when completed will be worth well into nine figures in sales for HHE which will possibly translate to a very significant amount in the divestment of the HHE interests by Borqs… With HHE’s successful business expansion just in the State of Hawaii, we are certain that HHE will have a bright future in other densely populated states with plentiful sunlight such as California… We intend to comply with all of the requirements of the US government. The divestment, when completed, is expected to provide a large liquidity position to Borqs, and management may seek approval from the Board of Directors to allocate an appropriate amount for buy back of our outstanding ordinary shares from the market. We believe the current market price is not reflective of the correct value of the Company.