When Beijing pulled the plug on China Venturetech Investment Corp (CVIC) in June one of those who received a shock was struggling Australian battery group Apollo Batteries. CVIC subsidiary Red Lion Resources owns 47.65 per cent of Apollo which relies on large loans from CVIC/Red Lion to continue trading. Apollo shares are now suspended from trading on the Australian Stock Exchange until CVIC's intentions regarding Apollo are clarified. Although Apollo's future is uncertain the company is bravely pushing ahead with its mainland investments recently buying a 59.5 per cent stake in the country's largest exporter of automotive batteries, Hua Yang Battery. Apollo acquired its Hua Yang stake by transferring its Australian battery production plant and equipment to Hua Yang's factory in Yangzhou, Jiangsu province. Hong Kong Stock Exchange-listed investment fund China Assets (Holdings) is also set to invest US$1.8 million for a 26.88 per cent stake in the factory that will enable Hua Yang to complete the installation of Apollo's equipment and substantially boost production. China Assets has cross-shareholdings with another Hong Kong Stock Exchange-listed company, First Shanghai Investments, in which CVIC is a large shareholder. Apollo managing director George Su also revealed that his board was negotiating with a group of potential investors to acquire CVIC's stake in Apollo and repay the A$21 million (about HK$100 million) that Apollo owes CVIC. Mr Su, who previously worked for various CVIC companies, hopes a deal can be finalised by the end of the year, enabling CVIC to unwind its relationship with Apollo. For the time being CVIC, which is being dismantled by the mainland's central bank, has agreed not to call up its outstanding loans to Apollo - which is just as well as Apollo would probably be unable to repay them. The Hua Yang factory is producing batteries at an annual rate of 450,000, but Apollo's chief executive Greg Ward said this should be lifted to about one million within two years. About 30 per cent of production would be destined for Australia and New Zealand with Europe also being an increasingly important market. Hua Yang sends batteries to France and Germany and shipments have begun to Sweden and Belgium. Negotiations are under way with a European battery manufacturer to provide technical assistance to Hua Yang to ensure batteries meet European design requirements. China Assets has also struck a deal with Apollo that gives it the right to swap all or part of its direct stake in Hua Yang for shares in Apollo. The deal is supposed to give China Assets a way of easily exiting its investment if and when it chooses. However, with Apollo shares suspended from trading Apollo scrip is just as illiquid as Hua Yang shares. In Australia, Apollo will continue as an importer and marketer of batteries.