Securities code: 002274 securities abbreviation: Jiangsu Huachang Chemical Co.Ltd(002274) Announcement No.: 2022-008 Jiangsu Huachang Chemical Co.Ltd(002274)
Announcement on foreign investment in venture capital funds
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.
1、 Overview of foreign investment
Jiangsu Huachang Chemical Co.Ltd(002274) (hereinafter referred to as “the company” and “the company”) intends to invest in Changzhou Ruiliang venture capital partnership (limited partnership) (Preparatory) (hereinafter referred to as “Changzhou Ruiliang”) and participate in the venture capital fund (hereinafter referred to as “investment fund” or “fund”) established by Jiangsu Ruihua Venture Capital Management Co., Ltd. (hereinafter referred to as “Jiangsu Ruihua”), The scale of the investment fund is RMB 1 billion (phase I). The company plans to subscribe RMB 50 million as a limited partner, accounting for 5% of the capital contribution; Source of funds: self owned funds.
On January 17, 2022, the 13th meeting of the sixth board of directors of the company deliberated and adopted the proposal on foreign investment and participation in industrial investment fund. This foreign investment does not constitute a related party transaction. This foreign investment is within the approval authority of the board of directors and does not need to be submitted to the general meeting of shareholders for deliberation.
This foreign investment does not constitute a major asset reorganization stipulated in the administrative measures for major asset reorganization of listed companies, and does not need to be approved by relevant departments.
2、 Basic information of main counterparties
1. Jiangsu Ruihua Venture Capital Management Co., Ltd. (general partner)
Name: Jiangsu Ruihua Venture Capital Management Co., Ltd;
Unified social credit Code: 91320102ma1m9jyt3p;
Address: No. 699-1, Xuanwu Avenue, Xuanwu District, Nanjing;
Legal representative: Guo Shungen;
Date of establishment: December 25, 2014;
Registered capital: 10 million yuan;
Business scope: venture capital and management; Asset management; Industrial investment; Business information consultation; Investment consulting. (for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments).
At present, Jiangsu Ruihua has no relationship or interest arrangement with the company, and it has no relationship or interest arrangement with the controlling shareholder, actual controller, directors, supervisors and senior managers of the company.
Jiangsu Ruihua has been registered as a private fund manager in China fund industry association with the registration code of p1025801.
2. Changzhou Industrial Investment Fund (limited partnership) (limited partner)
Name: Changzhou Industrial Investment Fund (limited partnership);
Unified social credit Code: 91320400ma1wx1lk8u;
Type: limited partnership;
Address: floor 10, building 4, Culture Plaza, No. 2, Jinxiu Road, Xinbei District, Changzhou;
Executive partner: Changzhou Municipal Government Investment Fund Management Co., Ltd;
Date of establishment: July 18, 2018;
Business scope: industrial investment, equity investment, venture capital, infrastructure investment and investment management (enterprises shall not engage in financial and other financial businesses, except those that need to be licensed and filed according to law); Asset entrusted management, equity management, investment and investment management consulting. (for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments).
3. Changzhou Jinsha Technology Investment Co., Ltd. (limited partner)
Name: Changzhou Jinsha Technology Investment Co., Ltd;
Type: limited liability company;
Unified social credit Code: 91320413674870555n;
Address: No. 88, Jintan Avenue, Jintan District, Changzhou City;
Legal representative: Zhou Sheng;
Date of establishment: May 4, 2008;
Registered capital: 100 million yuan;
Business scope: investment and operation of science and technology industry projects; Equity investment; Project management; Investment management; Investment consulting; Infrastructure development of science and Technology Industrial Park; Computer technology consulting services; Installation works of main engine and auxiliary equipment of pump station and electrical equipment of hydropower (pump) station; Embankment filling, embankment rectification and reinforcement, anti-seepage and seepage guidance, pond filling and foundation consolidation, embankment waterproof works, slope protection and bank protection, embankment top hardening, road construction, embankment greening, biological prevention and control, and construction of embankment crossing, river crossing and embankment crossing buildings below class III. (for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments). The controlling shareholder of Changzhou Jinsha Technology Investment Co., Ltd. is Jiangsu Jintan Investment Holding Co., Ltd. and the actual controller is Changzhou Jintan District People’s government.
4. Tibet Ruihua Capital Management Co., Ltd. (limited partner)
Name: Tibet Ruihua Capital Management Co., Ltd;
Type: limited liability company;
Unified social credit Code: 9154000058575400xd;
Address: No. 4, floor 13, unit 2, building 7, Jinma international, Liuwu New District, Lhasa;
Legal representative: Zhang Aoxing;
Date of establishment: December 14, 2011;
Registered capital: 160 million yuan;
Business scope: equity investment; Asset management; Capital management.
The controlling shareholder of Tibet Ruihua Capital Management Co., Ltd. is Jiangsu Ruihua Investment Holding Group Co., Ltd. and the actual controller is Zhang Jianbin.
5. Shenzhen shengtun Group Co., Ltd. (limited partner)
Name: Shenzhen shengtun Group Co., Ltd;
Type: limited liability company;
Unified social credit Code: 91440300279405311y;
Address: unit 3510-3511, Luohu business center, No. 2028, Shennan East Road, Dongmen street, Luohu District, Shenzhen;
Legal representative: Yao juanying;
Date of establishment: October 19, 1993;
Registered capital: 2700 million yuan;
Business scope: equity investment; Asset management; Capital management.
The controlling shareholder of Shenzhen shengtun Group Co., Ltd. is Shenzhen Zeyan Industrial Development Co., Ltd. and the actual controller is Yao xiongjie.
3、 Basic information of Investment Fund (subject matter)
Changzhou Ruiliang venture capital partnership (limited partnership) is under preparation. The proposed executive partner is Jiangsu Ruihua Venture Capital Management Co., Ltd. (general partner). The proposed investor, amount and proportion of capital contribution: Jiangsu Ruihua Venture Capital Management Co., Ltd. subscribed 10 million yuan, accounting for 1% of the amount of capital contribution; Changzhou Industrial Investment Fund subscribed 150 million yuan, accounting for 15% of the capital contribution; Changzhou Jinsha Technology Investment Co., Ltd. subscribed 250 million yuan, accounting for 25% of the capital contribution; Tibet Ruihua Capital Management Co., Ltd. subscribed 440 million yuan, accounting for 44% of the capital contribution; Shenzhen shengtun Group Co., Ltd. subscribed 100 million yuan, accounting for 10% of the capital contribution; The company subscribed 50 million yuan, accounting for 5% of the capital contribution.
The controlling shareholder, actual controller, shareholders holding more than 5%, directors, supervisors and senior managers of the company have not participated in the subscription of investment fund units or held any post in the investment fund; There is no relationship or interest arrangement. The above investment matters are not expected to lead to horizontal competition or related party transactions.
4、 Main terms of the partnership agreement
This partnership agreement is drafted and prepared in accordance with the partnership law of the people’s Republic of China. In addition to the statutory provisions, the main provisions include:
1. Duration of partnership. The partnership term of the partnership is [8] years, calculated from the date of establishment of the partnership. This Agreement shall be binding on all partners from the effective date. The date of establishment is the date of establishment of the industrial and commercial bank.
The investment period of the partnership is [4] years, calculated from the date of establishment of the partnership. The investment period of the partnership shall not be extended, except in case of force majeure and approved by the partners’ meeting. After the expiration of the investment period, the partnership enters the exit period, which is [3] years, and can be extended for 1 year after being deliberated and approved by the partners’ meeting. During the withdrawal period, the partnership shall not engage in new project investment activities, except for the investment arrangements that have completed the investment decision and signed a binding agreement during the implementation of the investment period.
Upon deliberation and approval by the partners’ meeting, the term of partnership may be extended for one year each time for no more than three times. If the term of partnership exceeds 8 years, it can be extended only with the consent of Changzhou Municipal Industrial Investment Fund (limited partnership). For the extension of the partnership term, the executive partner shall submit an application to the partners’ meeting 6 months before the expiration of the partnership term. Upon the expiration of the partnership term (including the extended term), the partnership will enter into liquidation. If all the projects invested by the partnership are withdrawn within [6] years from the date of establishment of the partnership, the partnership shall be dissolved in advance from the date of withdrawal of the last project and go through relevant liquidation procedures.
2. Fund custody. The executive partner shall select a commercial bank with private placement fund custody qualification as the fund custodian in Changzhou. The selection and change of the custodian that does not meet the provisions of this chapter shall be confirmed by Changzhou Industrial Investment Fund (limited partnership).
As a neutral third party and professional institution, the fund custodian is responsible for providing fund security, investment supervision, real-time clearing and automatic information report support.
3. Investment decisions. The executive partner shall establish an investment decision-making committee as its internal decision-making body for the execution of partnership affairs. The investment decision-making committee obtains the decision-making power on the relevant investment and exit decisions of the partnership according to this agreement, unless otherwise agreed in this agreement.
The investment decision-making committee consists of five members, four appointed by the executive partner and one appointed by Changzhou Jinsha Technology Investment Co., Ltd., which shall be determined after deliberation and approval by the partners’ meeting of the fund. The chairman of the investment decision-making committee shall be designated by the executive partner. Changzhou Industrial Investment Fund (limited partnership) has the right to appoint an observer of the investment decision-making committee. The observer can only attend the meetings of the investment decision-making committee without voting rights. Any proposal related to the investment matters of the partnership that should be submitted to the investment decision-making committee for consideration according to this Agreement shall be submitted to Changzhou Industrial Investment Fund (limited partnership) for policy compliance review.
4. Income distribution and loss sharing. The cash income from the project investment includes but is not limited to dividends, bonuses, income from the transfer of investment in the invested enterprise, income from the liquidation of the invested enterprise or other income based on the project investment, which will no longer be used for the recovered funds of the investment, but the taxes (if any) payable by the partnership on such income shall be deducted. In order to avoid ambiguity, the actual expenses and estimated expenses corresponding to the project investment shall be deducted during the distribution of cash income.
During the term of partnership, if the partnership obtains cash income from project investment for any investment project, the executive partner shall organize distribution within 2 (two) months after deducting the actual expenses and estimated expenses of the project.
Unless otherwise specified in this agreement, the distributable funds obtained by the partnership from the invested enterprise (i.e. project investment income) are generally no longer used for fund investment. Distributable funds refer to project investment income (i.e. the funds received by the partnership due to the withdrawal or realization of investment projects (including the sale, disposal of investment projects and other withdrawal mechanisms), as well as dividends, interest and other similar income from investment projects) Non project investment income (including temporary investment income, other cash income attributable to the partnership except project investment income and temporary investment income), which can be distributed after deducting relevant taxes and reserved expenses.
The distributable income among all partners shall be distributed in the following order:
(I) distribute the principal of all partners: distribute the principal of each partner according to the proportion of the partners’ paid in capital contribution until the total amount of distribution obtained by each partner reaches its cumulative paid in capital contribution;
(II) threshold income of distribution partners: if there is still distributable income after the above principal distribution, it will continue to be distributed to all partners until the total distribution income obtained by each partner reaches the amount calculated at an annualized rate of return (simple interest and pre tax) of [8]% (8%) based on its accumulated paid in capital contribution;
(III) distribution of excess returns: after the above two rounds of distribution (I) and (II), there are still distributable returns, which are excess returns. 20% (20%) of the excess return shall be distributed to the general partner, and 80% (80%) shall be distributed among the limited partners according to the proportion of paid in capital contribution.
5. Application of law and dispute resolution. The conclusion, effectiveness, performance, interpretation, modification and termination of this Agreement shall be governed by the current laws of the people’s Republic of China.
Any dispute arising from or in connection with this Agreement shall be settled by both parties through negotiation. If the parties fail to reach an agreement within 60 (sixty) days after the dispute occurs, either party may apply for arbitration to the Changzhou Arbitration Commission where the partnership is registered. Except for the matters in dispute between the parties, the parties shall continue to perform their obligations in good faith in accordance with the provisions of this agreement.
As the industrial investment fund to be invested has not been established, the partnership agreement has not been signed; In view of this, the board of directors authorizes the chairman of the company to sign legal documents such as partnership agreement within the investment amount and investment agreement determined by the resolution of this meeting.
5、 Purpose of foreign investment, existing risks and impact on the company
1. Purpose of foreign investment and its impact on the company
The main purposes of this foreign investment in the industrial investment fund include: first, Suzhou Huachang Energy Technology Co., Ltd., a subsidiary of the company, is engaged in new energy business and hopes to seek development opportunities for its subsidiaries through foreign investment and cooperation; Second, as a financial investment, obtain a reasonable return.
The investment amount is small. The above investment matters will not affect the normal production and operation activities of the company and the steady implementation of the established development plan.
2. Existing risks
The investment fund established this time has the characteristics of long existence cycle and low liquidity, so the company’s investment may face a long investment payback period, and the investment process will be affected by many factors such as macro-economy, industry cycle, operation and management of investment object, which may affect the expectation of investment benefits
