Is there a finished egg under the pouring nest?
On the evening of February 9, Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) announced that the company received the notification letter from the controlling shareholder Jiangyin Chengxing Industrial Group Co., Ltd. (hereinafter referred to as “Chengxing group”) on February 9, According to the notification letter, Chengxing group received the civil ruling and decision issued by Jiangyin people’s Court of Jiangsu Province (hereinafter referred to as “Jiangyin court”) on February 8, 2022, and Jiangyin court ruled to accept Jiangyin regional headquarters economic Park Development and Investment Co., Ltd. (hereinafter referred to as “headquarters economic Park”) in accordance with the photographic decision The ruling on the reorganization application submitted by Chengxing group shall take effect from now on. “
Or affected by this news, on February 9, Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) closed at 6.60 yuan, which is the third consecutive daily limit of the stock.
The 21st Century Business Herald reporter learned that the 17083 million shares held by Chengxing group (accounting for 25.78% of the total share capital of the company) Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) will be auctioned online on February 14. This is the second online auction of the equity, which was sold out due to no bidding.
whether the reorganization can succeed is uncertain
Public information shows that Chengxing group was founded in 1984. Its products involve fine phosphorus chemical industry, fine coal chemical industry, petrochemical industry (PET, PTA), electronic chemicals, storage and logistics of liquid chemicals, international trade, financial investment, modern service industry and other fields. Its products sell well in China and are exported to 84 countries and regions in the world.
Chengxing group was once a well-known chemical group in China. It has entered the top 500 Chinese enterprises for 18 consecutive years, ranking 228 among the top 500 Chinese enterprises in 2019, Petrochina Company Limited(601857) 73rd among the top 500 Chinese private enterprises, Petrochina Company Limited(601857) 14th among the top 100 chemical enterprises and 12th among the top 100 private enterprises in Jiangsu Province.
However, in 2020, the development of Chengxing group suddenly “stopped abruptly”, and the actual controller Li Xing was “restricted from high consumption” since September 2021. The applicant and executor was Jingjiang Runyuan rural microfinance Co., Ltd. The latest “consumption restriction order” for Chengxing group and Li Xing was issued on January 4, 2022. The applicant was Shanghai Pudong Development Bank Co.Ltd(600000) Jiangyin sub branch, and the cause of action was “financial loan contract dispute”.
In Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) the announcement of replying to the inquiry letter of Shanghai Stock Exchange on October 12, 2021, Chengxing group has not only been insolvent, the relevant assets have been frozen by the judiciary, but also occupied the funds of listed companies and cannot be returned.
In February 2022, the headquarters economic Park applied to Jiangyin court for reorganization of Chengxing group because Chengxing group could not pay off its due debts, the amount of liabilities was huge, the assets were insufficient to pay off all its debts, and it was obviously lack of solvency.
According to the announcement of Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) February 9, 2022, Jiangyin court not only accepted the reorganization application, but also appointed Jiangsu mousheng law firm as the manager of Chengxing group.
However, as of December 31, 2021, the capital principal and interest of Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) still occupied by Chengxing group and its related parties totaled about 2.239 billion yuan (Unaudited), which has not been returned yet. There is still uncertainty about the success of subsequent reorganization.
The 21st Century Business Herald reporter noted that on November 9, 2021, Jiangyin building decoration products factory applied to Wuxi intermediate people’s court for bankruptcy reorganization of Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) on the grounds that Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) “it could not pay off its due debts and its assets were insufficient to pay off all its debts”.
At present, Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) has not received the ruling of the court on reorganization. If the court formally accepts it, Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) will be at risk of being declared bankrupt due to the failure of reorganization. Once declared bankrupt, the listing of the company’s shares will be terminated according to the relevant provisions of the Shanghai Stock Exchange.
The equity held by will be auctioned by the second law
Chengxing group may not only have economic disputes with the headquarters economic Park, but its 17083 million shares Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) will also be auctioned by Jiangyin court from “10:00 on February 14 to 10:00 on February 15, 2022”. The starting price is 64572 million yuan, or about 3.78 yuan per share.
On February 9, the share price of Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) closed at 6.60 yuan, about 75% higher than the starting price per share. However, this does not mean that someone will bid.
The equity was auctioned for the first time from 10:00 on January 13 to 10:00 on January 14, 2022. The starting price was 807.15 million yuan, but it was sold out because there was no bidder.
21st Century Business Herald reporter noted that the application for judicial auction is chengdie Co., Ltd., which is a joint venture between Chengxing group and Japan dieli Co., Ltd. established in 2008.
In September 2019, Jiangsu Chengxing Phosphorus Chemical Group Import and Export Co., Ltd. (hereinafter referred to as “Chengxing import and export”) under Chengxing Group signed three procurement contracts with chengdie Co., Ltd., and Chengxing group provided joint and several liability guarantee. After the contract was signed, Chengxing import and export failed to pay as agreed. After chengdie Co., Ltd. sued, the Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) shares held by Chengxing group were frozen by the court.
Since Chengxing group has not fulfilled the obligations specified in the effective legal documents of Jiangyin court, Jiangyin court ruled on December 7, 2021 that “auction and sell off 25.78% of the shares held by Chengxing group.”
In addition, Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) Hanying investment, the second largest shareholder, holds a total of 106107921 shares (accounting for 16.01% of the total share capital of the company), which will also be auctioned by the judiciary from “10:00 on February 14 to 10:00 on February 15, 2022”, and its first legal auction was also sold out because there was no bidding.
“Who is stupid, who will go to the auction!” A private equity fund in Jiangsu told the 21st Century Business Herald that although the price of Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) is very low, the debt behind it is not small. “Once the auction is successful, it may step on a thunder. The price difference in the secondary market is not enough to fill the debt gap.”
In addition to the “risk of judicial auction of the company’s shares held by the company’s controlling shareholder and the second largest shareholder”, the announcement on the evening of Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) February 9 also disclosed seven other risks, such as “the risk warning of delisting of the company’s shares has been implemented”, “the risk of bankruptcy and termination of listing due to reorganization failure”, “the risk of termination of listing due to non normalization of net assets” “Risk of being filed”, “risk of the company’s controlling shareholders and their related parties occupying the company’s funds and not being repaid”, “risk of pledge and freezing of the company’s shares held by the company’s controlling shareholders” and “risk related to litigation and freezing”.
Although eight risks were suggested, there were three consecutive trading limits after the Spring Festival.
