Recently evening, Souyute Group, the parent company of leisure brand trend frontline, issued an indicative announcement regarding the application for reorganization by creditors, pointing out that on February 28, it received Nanchang Taishun Garment Co., Ltd. (hereinafter referred to as “Taishun”). Company”) “Notice on Application for Reorganization”.
Taishun Company applied to the Dongguan Intermediate People’s Court on February 25, 2022 to reorganize the company on the grounds that Souyute could not pay off its due debts and clearly lacked solvency, but it had reorganization value.
The announcement shows that the applicant is a clothing supplier of Souyute. From November 16, 2019 to September 28, 2020, Taishun Company signed seventeen “Ordering Contracts (FOB)” with Souyute.
After the signing of the aforementioned contract, Taishun Company supplied goods to Souyute in accordance with the relevant agreement, and both parties confirmed it through the delivery summary document. Although Souyute successively paid part of the payment, it was not fully paid. After accounting, as of December 31, 2021, Taishun Company’s debt to Sou Yute was 10.5045 million yuan.
Souyute pointed out that according to the relevant provisions of the “Enterprise Bankruptcy Law of the People’s Republic of China”, if the court accepts the application for reorganization of the company submitted by the aforementioned applicant, the court will appoint an administrator, and creditors will declare their claims to the administrator in accordance with the law. The administrator or the company shall formulate a draft company reorganization plan within the prescribed time limit according to law and submit it to the creditors meeting for review and voting. The company’s creditors are paid off according to a reorganization plan approved by a court ruling. If the company or the manager fails to submit a draft reorganization plan on time, or the draft reorganization plan cannot be approved by the court, or the debtor cannot or does not implement the reorganization plan, the court will rule to terminate the company’s reorganization procedures and declare the company bankrupt. .
It is understood that for enterprises, the reorganization procedure is different from the bankruptcy liquidation procedure. The reorganization procedure aims to save the debtor’s enterprise, retain the debtor’s legal person qualifications and restore sustained profitability, through the readjustment, operation and management of its assets and liabilities. A judicial process for rescheduling a business out of financial distress and into rebirth.
Against this background, Souyute’s board of directors also has a very positive attitude towards the application for reorganization. It pointed out that during the court’s review of the reorganization application, the company will cooperate with the court in accordance with the law to study and demonstrate the feasibility of the company’s reorganization. If the court rules that the company enters reorganization, the company will actively cooperate with the court and the administrator in the reorganization work in accordance with the law, perform the legal obligations of the debtor in accordance with the law, and actively work with all parties to discuss and resolve debt issues and issues on the premise of equally protecting the legitimate rights and interests of all parties. Plans for future business development issues, and strive to formulate a draft reorganization plan as soon as possible and submit it to the creditors meeting for review and court approval. “The company will strive to improve the company’s asset and liability structure to the greatest extent through the implementation of the reorganization plan, improve the company’s operating capabilities, resolve the company’s debt crisis and operating crisis, and promote the company to return to a healthy and sustainable development track as soon as possible.”
Souyute admitted frankly that in 2020, the severe impact of the new crown epidemic caused a serious decline in the company’s business, a significant increase in inventory, and very tight funds, and its impact spread to 2021. Since 2021, due to financial constraints and liquidity shortages, the company and its subsidiaries have overdue and defaulted on many financial institution loans. Many financial institutions have filed lawsuits or arbitrations and applied for property preservation. Some bank accounts of the company and its subsidiaries have been banned by the People’s Court. Many land, real estate, investment equity and other assets were frozen and seized by the People’s Court. Affected by the shortage of funds, the company has mainly sold inventory products since 2021, and its performance and gross profit margin have dropped significantly, resulting in operating losses.
Just recently in the evening, Souyute also issued an announcement about the company’s signing of the “Investment Intention Agreement for Bankruptcy and Reorganization”, stating that in order to solve the company’s debt problem and restore the company’s ability to continue operating as soon as possible, the company has negotiated with the High-tech Zone Group After friendly negotiation, the Hi-tech Zone Group intends to become an investor in the company’s reorganization and participate in the company’s reorganization investment. To this end, the company and the High-tech Zone Group signed the “Investment Intention Agreement on Bankruptcy and Reorganization” on March 1, 2022.
Public information shows that Hi-tech Zone Group is the second largest shareholder of Soyute. It currently holds 249,250,540 shares of the company, accounting for 8.06% of the company’s total share capital. It is a shareholder holding more than 5% of the company’s shares and is a related legal person of the company.
The content of the relevant agreement disclosed by Souyute shows that the two parties have initially agreed that Souyute will retain some assets during this reorganization, and the remaining assets will repay debts in accordance with the provisions of the reorganization plan. After the completion of this reorganization, Souyute will retain some of its original businesses. At the same time, the Hi-tech Zone Group will also choose opportunities to introduce new businesses to enhance Party A’s profitability.
Souyute said that the High-tech Zone Group, as an intended investor, will participate in the research and demonstration of the feasibility of Souyute’s reorganization, and actively discuss with all parties solutions to the company’s debt problems and future operating and development issues, which will be conducive to the smooth resolution of the company. The debt crisis and operating crisis promote the success of the company’s reorganization, restore the company’s sustainable operating capabilities and profitability, and promote the company’s early return to a healthy and sustainable development track.
However, the specific content of this cooperation remains to be determined.��The reorganization plan approved by the court ruling and the specific agreement signed at that time shall prevail, and there are still major uncertainties.
Previously, on January 29, Souyute disclosed its 2021 performance forecast. It estimated that its operating income in 2021 would be 5 billion to 5.3 billion yuan, and the net profit loss attributable to shareholders of the listed company would be 3.4 billion to 3.95 billion yuan.
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