After the termination of major asset restructuring, the troubled Ruyi Group (002193) is still looking for a way out. An announcement on the evening of December 1 showed that the company planned to enter the high-end fiber new material industry through asset replacement.
Replace assets and enter new industries
The announcement shows that Ruyi Group and its wholly-owned subsidiary Jining Ruyi New Materials Technology Co., Ltd. plan to use some accounts receivable and inventory as disposal assets, and hold Lycra with the company’s affiliated party Jining Ruyi Wanzhong Venture Capital Management Partnership (Limited Partnership) Part of the equity of New Materials (Foshan) Co., Ltd. was exchanged for assets.
The assets to be acquired this time include some accounts receivable and inventory of Ruyi Group and Ruyi New Materials, with a total original book value of 984 million yuan, of which the original book value of accounts receivable is 736 million yuan, and the original book value of inventory is 248 million yuan. . The asset to be placed is Foshan Lycra’s equity worth 984 million yuan held by Vanzhong Chuangye.
The announcement shows that Foshan Lycra was established in Foshan City, Guangdong Province on August 3, 2021, and the legal representative is Qiu Chenran (a person acting in concert with Qiu Yafu, the actual controller of Ruyi Group). The initial registered capital is 500 million yuan, with Chuanglai Fiber holding 65% and Vanzhong Chuangye holding 35%. The main business is new material technology promotion services, synthetic fiber manufacturing, bio-based material manufacturing, and synthetic material manufacturing. The original shareholders increased their capital in Foshan Laika with land, factories, equipment and other fixed assets, intangible assets and related businesses used for production and operation. At the same time, the company pointed out in the announcement that after the capital increase is completed, Foshan Lycra can achieve an annual net profit of approximately 300 million yuan.
Regarding this asset replacement, Ruyi Group stated that this asset replacement can improve the company’s asset structure, solve the legacy issues of accounts receivable, enter the high-end fiber material industry, and enhance the company’s sustainable profitability.
Loss, share freeze, Ruyi Group’s crisis
It is reported that Ruyi Group was formerly Jining Woolen Textile Factory established in 1972. It was restructured into a joint-stock company in December 1993 and listed on the Shenzhen Stock Exchange in December 2007. It is a company integrating the design and production of worsted fabrics and clothing. , a large-scale textile and apparel group integrating sales. It has established offices, warehousing centers and marketing agencies in more than 20 countries and regions around the world, covering six continents. It is also the first company in the industry to win the first prize of the National Science and Technology Progress Award. Related party Ruyi Fashion also ranked first in the list of the top 500 most competitive Chinese textile and apparel companies in 2017-2018, occupying a pivotal position in the industry.
However, with the outbreak of the debt crisis of the major shareholder Ruyi Technology Group, Ruyi Group was also affected, and the good momentum came to an abrupt end. In 2019, Ruyi Group’s net profit dropped 51% year-on-year. Coupled with the epidemic, the company has become more and more difficult. In 2020, the company’s net profit fell by 89% year-on-year; in the third quarter report of 2021, the company’s operating income in the first three quarters was only 428 million yuan, a year-on-year decrease of 15.91%; the net profit attributable to the parent company was -43.2963 million yuan, A year-on-year decrease of 309.82%.
This year’s third quarter report also shows that as of the end of the reporting period, all 60.5147 million shares held by the major shareholder Ruyi Technology Group have been pledged and frozen; almost all the shares held by Ruyi Technology’s concerted actors Ruyi Wool Textile Group and Shandong Jining Ruyi Import and Export Co., Ltd. All frozen.
In October this year, the major asset restructuring matter of Ruyi Group’s purchase of Jining Ruyi Brand Investment Holdings Co., Ltd., which had been planned for more than two years, was also announced to be terminated. Among the reasons for termination, Ruyi Group stated that because the target company has many overseas operating entities and is affected by the overseas new coronavirus epidemic, it is more difficult for the company and various intermediaries to carry out various tasks. In light of the current market environment, after friendly negotiations with the counterparty and careful study, the company decided to terminate the planning of this major asset restructuring.
Establish a debt committee to resolve liquidity issues
In addition, at the recent investor online reception day event, Ruyi Group stated that the establishment of a debt committee by Ruyi Technology Group will not have an adverse impact on the company’s production and operations. The company has joined the creditors committee of provincial banking financial institutions along with Ruyi Technology Group. All members of the credit committee have agreed to implement an interest rate reduction and burden reduction plan for Ruyi Technology and related affiliated companies to stabilize the financing scale, and implement debt extensions, interest rate cuts, and buffers within a three-year period. The debt problem will be solved through various means, such as period, and all the company’s bank debts have been included in the scope of reconciliation by the debt committee.
Ruyi Technology Group has started the listing of relevant high-quality assets and will solve liquidity problems through asset securitization; Ruyi Technology Group and its affiliated companies are producing and operating normally, and the steady growth of main business income and profitability will further enhance the company’s future cash repayments capabilities; at the same time, the company will speed up the introduction of strategic investors and actively raise funds through various channels to solve liquidity problems.
</p
