Securities code: 002274 securities abbreviation: Jiangsu Huachang Chemical Co.Ltd(002274) Announcement No.: 2022-006 Jiangsu Huachang Chemical Co.Ltd(002274)
Announcement on termination of share repurchase scheme and exemption from repurchase related commitments
The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete, and shall be jointly and severally liable for false records, misleading statements or major omissions in the announcement.
On January 17, 2022, Jiangsu Huachang Chemical Co.Ltd(002274) (hereinafter referred to as “the company” and “the company”) held the 13th meeting of the sixth board of directors, deliberated and adopted the proposal on terminating the share repurchase scheme and exempting the repurchase related commitments; It is agreed that the company shall terminate the share repurchase scheme and exempt the repurchase related commitments. The commitments related to the exemption of repurchase need to be submitted to the general meeting of shareholders of the company for deliberation. The above matters comply with the company law, the securities law, the detailed rules for the implementation of share repurchase by listed companies, the guidelines for the supervision of listed companies No. 4 and other relevant laws and regulations. The relevant information is hereby announced as follows:
1、 Repurchase plan, commitments and implementation of repurchase plan
On January 25, 2021, the 8th meeting of the 6th board of directors held by the company deliberated and approved the proposal on share repurchase scheme by centralized bidding, and agreed that the company would use its own funds to repurchase the company’s shares by centralized bidding. The total amount of funds for share repurchase shall not be less than RMB 150 million (inclusive) and not more than RMB 250 million (inclusive), The share repurchase price shall not exceed RMB 6.50/share, and the repurchase period shall not exceed 12 months from the date when the company’s board of directors deliberates and approves the share repurchase plan. The company disclosed the repurchase report (Announcement No.: 2021-006) on January 30, 2021 and the announcement on initial repurchase of company shares (Announcement No.: 2021-011) on March 25, 2021; On April 24, 2021, the company disclosed the announcement on adjusting the price ceiling of the repurchase scheme (Announcement No.: 2021-025), which will adjust the share repurchase price from no more than 6.50 yuan / share to no more than 7.50 yuan / share by means of centralized bidding transaction; On June 4, 2021, the company implemented the 2020 annual equity distribution and distributed 1.00 yuan in cash to all shareholders for every 10 shares. After the implementation of the equity distribution plan, the proposed repurchase price of the company’s share repurchase plan was adjusted from no more than (including) 7.50 yuan / share to no more than (including) 7.40 yuan / share, See “notice on adjusting the price and quantity of share repurchase after the implementation of the rights and interests allocation in 2020” (Bulletin number: 2021-036).
As of the date of this announcement, the company has repurchased 9904936 shares of the company through centralized bidding trading through the special securities repurchase account, accounting for about 1.04% of the company’s current total share capital. The maximum transaction price for purchase is 6.48 yuan / share, the minimum transaction price for purchase is 6.13 yuan / share, and the total transaction amount is 62685447 yuan. The company’s repurchase complies with the requirements of relevant laws and regulations and the established repurchase plan.
2、 Reasons for terminating the share repurchase scheme and applying for exemption from fulfilling commitments related to repurchase
The total actual repurchase amount of the company was 62.685447 million yuan, which did not reach the lower limit of the planned amount of 150 million yuan (including) approved by the board of directors. There was a difference between the actual implementation of the repurchase plan and the repurchase plan originally disclosed. 1. Reasons for termination of share repurchase scheme
The repurchase period of this repurchase plan is no more than 12 months from the date when the company’s board of directors deliberates and approves the share repurchase plan, that is, the maturity date is January 25, 2022. On the trading day before the disclosure date of this announcement, the closing price of the company’s shares was 12.42 yuan / share, which was higher than the upper limit of repurchase price of 7.40 yuan / share; In addition, the follow-up will involve window periods such as annual performance forecast and performance express. According to the detailed rules for the implementation of share repurchase by listed companies of Shenzhen Stock Exchange, the company’s shares shall not be repurchased. The above matters, in essence, constitute that the share repurchase scheme cannot be continued. The termination of the share repurchase plan complies with the provisions of Article 33 of the detailed rules for the implementation of share repurchase by listed companies.
2. Reasons for applying for exemption from repurchase related commitments
During the implementation of the repurchase, the company’s share price rose rapidly, and the share price was higher than the upper limit of the repurchase price. At the same time, due to the repurchase restrictions in the company’s regular reporting window period (including 2020 performance express, 2020 annual report, etc.), the number of days of shares available for repurchase meeting the requirements is less, resulting in the final repurchase amount not reaching the lower limit of the overall repurchase scheme. In addition, there is no other difference between the implementation of this share repurchase and the repurchase plan considered and approved by the board of directors. In view of the above actual situation, the company plans to apply for exemption from the share repurchase commitment.
Time nodes related to the implementation of share repurchase this time:
Time matters
On January 26, the proposal on share repurchase scheme by centralized bidding was disclosed
On January 26, 2021, the closing price is 4.55 yuan, and the repurchase price of the scheme is no more than 6.5 yuan / share
Performance express window period from January 26 to February 6
During the eight trading days from February 7 to March 23, the intraday price is lower than 6.5 yuan. The repo can be made (month. Day): 2.8, 2.9, 2.10, 2.18, 2.19, 2.22, 2.23 and 3.23
On March 24, the announcement on initial repurchase of shares of the company was disclosed
On March 24, 2021, 9904936 shares were repurchased through centralized bidding, with a total amount of 62685447 yuan.
March 25 – April 24 annual report window period
On April 24, the announcement on adjusting the price ceiling of the repurchase scheme was disclosed, which was adjusted to no more than 7.5 yuan / share
During the eight trading days from April 25 to now, the intraday price is lower than 7.5 yuan. The repo can be made (month. Day): 4.26, 4.27, 4.28, 4.29, 4.30, 5.6, 5.7 and 5.20
According to the above time nodes, after the company disclosed the share repurchase scheme, the repurchase can be implemented only within 8 trading days, during which the Company repurchased 9904936 shares.
The company took remedial measures to adjust the upper limit of the repurchase price from 6.5 yuan / share to 7.5 yuan / share.
As the period was at the end of April and before the May Day holiday, the company did not immediately repurchase shares from the perspective of capital planning; Results after the holiday, the share price rose by the limit and closed at 7.93 yuan / share on May 7.
To sum up: the company’s failure to fulfill its commitments is due to objective market factors, resulting in the failure to implement the share repurchase plan; Moreover, the company has also taken necessary remedial measures, and there is no subjective and intentional failure to fulfill commitments. In view of the above circumstances, it is proposed to request the general meeting of shareholders to exempt from fulfilling the commitments related to share repurchase in accordance with the provisions of the guidelines for the supervision of listed companies No. 4.
3、 The impact of the termination of share repurchase scheme and exemption from repurchase related commitments on the company
The plan to terminate the share repurchase and the commitments related to the exemption of the repurchase comply with the provisions of relevant laws and regulations. The purpose of the share repurchase is: for the employee stock ownership plan; As the number and amount of repurchase did not meet the expectations, the arrangement for the implementation of the employee stock ownership plan of the company did not meet the expectations. After the termination of the share repurchase plan and the exemption of commitments related to share repurchase, the funds that have not implemented share repurchase can be used for production, operation and project construction, which is conducive to reducing financial expenses and improving the company’s anti risk ability; In the long run, it is conducive to the development and growth of the company and the protection of the interests of all shareholders.
4、 Independent opinions of independent directors
The independent directors unanimously agreed to the proposal on termination of share repurchase scheme and exemption of repurchase related commitments, and expressed independent opinions:
The plan to terminate the share repurchase and the commitments related to the exemption from repurchase comply with the company law, the securities law, the detailed rules for the implementation of share repurchase by listed companies and other relevant laws and regulations, and the relevant review procedures are properly performed; The company’s failure to fulfill its commitments is due to objective market factors, resulting in the failure to implement the share repurchase plan; Moreover, the company has also taken necessary remedial measures, and there is no subjective and intentional failure to fulfill commitments. After the termination of the share repurchase plan and the exemption of commitments related to the repurchase, the funds that have not implemented the share repurchase can be used for production, operation and project construction, which is in line with the long-term interests of the company and all shareholders.
5、 Documents for future reference
1. Resolutions of the 13th meeting of the 6th board of directors of the company;
2. Resolutions of the 12th meeting of the 6th board of supervisors of the company;
3. Opinions of independent directors.
It is hereby announced.
Jiangsu Huachang Chemical Co.Ltd(002274) board of directors
January 18, 2022
