Huajin Securities Co., Ltd
About Lb Group Co.Ltd(002601)
Verification opinions on temporarily replenishing working capital with some idle raised funds
Huajin Securities Co., Ltd. (hereinafter referred to as “Huajin securities” or “sponsor”) acts as a sponsor of Lb Group Co.Ltd(002601) (hereinafter referred to as ” Lb Group Co.Ltd(002601) ” or “company”) non-public offering of shares, In accordance with the measures for the administration of securities issuance and listing recommendation business, the stock listing rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, and the regulatory guidelines for listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies (revised in 2022), and other relevant provisions, Carefully and prudently checked the temporary replenishment of working capital by Lb Group Co.Ltd(002601) and its holding subsidiaries with some idle raised funds. The specific verification is as follows:
1、 Basic information of funds raised by non-public offering of shares
Approved by the reply on Approving the non-public development of shares of longmang Bailian Group Co., Ltd. (zjxk [2020] No. 3423) of China Securities Regulatory Commission and implemented in combination with the equity distribution in the third quarter of 2020, the company issued 207589367 RMB ordinary shares in this non-public offering at an issue price of 10.91 yuan / share, The total amount of funds raised this time is 2264799993.97 yuan. After deducting the issuance cost of 23346782.43 yuan (excluding value-added tax), the net amount of funds raised is 2241453211.54 yuan. The availability of the above raised funds has been verified by Lixin Certified Public Accountants (special general partnership) and issued the capital verification report of non-public development bank stock raised funds of longmang baillian Group Co., Ltd. (Xin Kuai Shi Bao Zi [2021] No. zg10136). The company has deposited the above-mentioned raised funds in the special account for raised funds opened for this non-public offering, and signed the tripartite supervision agreement on raised funds with the sponsor Huajin securities and the commercial bank storing the raised funds. 2、 Basic information of the non-public fund-raising project
According to the company’s non-public development bank stock plan (Revised Version), the total amount of funds raised in this issuance shall not exceed RMB 2264.8 million. The net amount of funds raised after deducting the issuance expenses will be used to invest in the following projects: unit: 10000 yuan
No. total investment amount of investment projects with raised funds investment amount of raised funds
1 construction project of titanium dioxide production line with an annual output of 200000 tons by chlorination 174922.00 150000.00
2. Supplementary working capital 76480.00 76480.00
Total 251402.00 226480.00
Before the raised funds are in place, the company can invest with self raised funds according to the actual situation of the investment projects with raised funds, and replace them after the raised funds are in place. If the actual raised funds (after deducting the issuance expenses) are less than the total amount of funds to be invested, the insufficient part will be solved by the company with its own funds or through other financing methods. The board of directors of the company may, in accordance with the authorization of the general meeting of shareholders and the actual needs of the project, appropriately adjust the investment mode, sequence and amount of the raised funds of the above-mentioned projects. If the investment project of the funds raised through the issuance of shares is to be implemented through the subsidiary, it will be invested in the subsidiary in legal ways such as capital increase and loan, and the specific investment method shall be determined by the company according to the actual situation.
3、 Approval of the use of previously raised funds
1. The 13th meeting of the 7th board of directors and the 13th meeting of the 7th board of supervisors held by the company on February 18, 2021 deliberated and adopted the proposal on using the raised funds to provide loans to holding subsidiaries to implement raised investment projects, The company agreed to use the raised funds to provide a loan of no more than 150 million yuan to the holding subsidiary Longbai Lufeng Titanium Industry Co., Ltd. 1 for the construction of raised investment projects, and the independent directors expressed their consent. 2. The 13th meeting of the 7th board of directors and the 13th meeting of the 7th board of supervisors held on February 18, 2021 deliberated and adopted the proposal on replacing self raised funds invested in projects raised in advance with raised funds. The company plans to use the raised funds of 167530200 yuan to replace self raised funds invested in projects raised in advance, The independent directors gave their consent.
3. At the 13th meeting of the 7th board of directors and the 13th meeting of the 7th board of supervisors held on February 18, 2021, the company deliberated and adopted the proposal on temporarily replenishing working capital with some idle raised funds. On the premise of ensuring that the normal implementation of investment projects with raised funds is not affected, The company and its holding subsidiaries intend to use idle raised funds of no more than RMB 1.2 billion (including this amount) to temporarily supplement working capital. The service life shall not exceed 12 months from the date of deliberation and approval by the board of directors of the company. The independent directors expressed their consent. As of February 8, 2022, the company has returned all the above-mentioned 1032469800 yuan of idle raised funds used to supplement working capital to the special account for raised funds.
For details of the above, please refer to China Securities Journal, securities times and cninfo (www.cn. Info. Com. CN.) published by the company on February 19, 2021 and February 9, 2022 respectively Relevant announcements. 1 on August 26, 2021, Lufeng Xinli Titanium Industry Co., Ltd. was renamed “Longbai Lufeng Titanium Industry Co., Ltd.”.
1. As of February 8, 2022, the specific use of the raised funds of the parent company is as follows:
Project amount (RMB)
The total amount of funds raised on February 9, 2021 was 2264799993.97
Less: issuance fee (note) 20000000.00
On February 9, 2021, the net amount of funds actually raised was 2244799993.97
Plus: interest income 609263.66
Less: 2244799393.97 yuan has been used in accordance with the scope of raised funds
Less: bank service charge 630.00
The balance of the special account for raised funds is 609233.66
Note: the difference of 3346782.43 yuan between the deduction of 20000000.00 yuan of issuance expenses on February 9, 2021 and the actual issuance expenses (excluding tax) of 233466782.43 yuan in the above table is due to the company’s use of its own funds to advance the issuance expenses of 3346782.43 yuan, and the issuance expenses advanced in the early stage have been returned by the raised funds account.
2. According to the scope of use of the raised funds, 150 million yuan of the raised funds shall be used for the “construction project of titanium dioxide production line with an annual output of 200000 tons of chlorination process”. The company has allocated 1500000000.00 yuan to Longbai Lufeng Titanium Industry Co., Ltd. (hereinafter referred to as “Longbai Lufeng”) as required for the construction of the raised capital project.
As of February 8, 2022, the balance of funds raised by Longbai Lufeng, a subsidiary of the company, was RMB 694793852.21. The specific usage is as follows:
Project amount (RMB)
Total amount of raised funds received: 1500000000.00
Less: 167530241.44 self raised funds invested in advance in the early stage of replacement
Less: temporary supplementary working capital 1032469758.56
Less: 639120266.76 yuan invested in projects invested with raised funds in the current period
Less: bank service charge 8360.64
Plus: interest income 1452721.05
Plus: return of working capital 1032469758.56
The balance of the special account for raised funds is 694793852.21
5、 The plan of temporarily replenishing working capital with some idle raised funds this time
1. As the construction of projects invested with raised funds needs a certain period, according to the construction progress of projects invested with raised funds, some of the raised funds are idle in the short term at this stage. In order to improve the use efficiency of the raised funds, on the premise of ensuring that the normal implementation of the investment projects with the raised funds is not affected, the company and its holding subsidiaries intend to temporarily supplement the working capital with idle raised funds of no more than 600 million yuan (including this amount), and the service life shall not exceed 12 months from the date of deliberation and approval by the board of directors of the company, The above funds shall be returned to the special storage account for raised funds in time before expiration.
2. With the continuous expansion of the company’s business scale and the increasing demand for working capital, the use of some idle raised funds to temporarily supplement working capital will help to improve the use efficiency of raised funds, reduce the company’s financial cost and improve the company’s operating efficiency. The company uses the idle raised funds of no more than 600 million yuan to temporarily supplement the working capital. It is expected that the potential interest expenditure of the company will be reduced by about 22.2 million yuan in 12 months (calculated according to the one-year lpr3.70%, which is only the calculation data and does not constitute the company’s commitment).
6、 The rationality and necessity of temporarily replenishing working capital with some idle raised funds this time
The use of some idle raised funds to temporarily supplement working capital is conducive to improving the use efficiency of raised funds, meeting the company’s working capital needs, enhancing the company’s business scale, profitability and market competitiveness, and further improving the company’s operating efficiency. There is no situation of changing the investment direction of raised funds and damaging the interests of shareholders in a disguised manner. 7、 Relevant review and approval procedures for temporarily replenishing working capital with some idle raised funds this time
The company and its holding subsidiaries intend to use idle raised funds of no more than 600 million yuan (including this amount) to supplement working capital, which has been deliberated and approved at the 32nd meeting of the seventh board of directors and the 32nd meeting of the seventh board of supervisors, and the independent directors have expressed their consent. According to relevant regulations, the plan of temporarily replenishing working capital with some idle raised funds falls within the decision-making authority of the board of directors and does not need to be submitted to the general meeting of shareholders for approval.
8、 The commitment to temporarily use some idle raised funds to supplement working capital
1. The company’s use of some idle raised funds to temporarily supplement working capital does not change the purpose of the raised funds in a disguised manner or affect the normal progress of the investment plan of the raised funds, and will not affect the normal implementation of the investment projects of the raised funds. If the progress of the investment project with raised funds is accelerated, the company will return the relevant funds to the special account for raised funds in time to ensure the normal progress of the investment project with raised funds.
2. Before the due date of temporarily replenishing working capital with some idle raised funds, the company will return the funds to the special account for raised funds in time.
3. The company will only temporarily use the idle funds raised for the production and supplementary operation of securities, and will not use the idle funds directly related to the main business of the company.
9、 Verification opinions of the recommendation institution
After verification, the sponsor believes that: Lb Group Co.Ltd(002601) and its holding subsidiaries intend to use some idle raised funds to temporarily supplement working capital, with a total amount of no more than 600 million yuan (including this amount), which can fully ensure the normal production and operation of the company, improve the use efficiency of raised funds, reduce financial costs, and do not affect the normal progress of investment projects with raised funds, There is also no situation of changing the investment direction of raised funds in a disguised form and damaging the interests of shareholders, which is in line with the interests of all shareholders. The service life of this temporary replenishment of working capital shall not exceed 12 months from the date of deliberation and approval by the board of directors. The company and its holding subsidiaries have deliberated and approved the temporary use of some idle raised funds to replenish working capital, The independent directors have expressed their explicit consent, and the decision-making procedures are legal and comply with the Shenzhen Stock Exchange
