Keep The Clouds Open And See The Moon? Court Approves *ST Cashmere Reorganization Plan

Walking on the edge of the suspension of the listing of *ST velvet, now finally ushered in a turning point. On the evening of November 14th, *ST announced that the intermediate people's Court of Yinchuan, the Ningxia Hui Autonomous Region (hereinafter referred to as the "Yinchuan intermediate people's court") approved the restructuring plan of Ningxia silver Limited by Share Ltd's cashmere industry and terminated the Limited by Share Ltd reorganization process of Ningxia's cashmere industry.

After the Yinchuan intermediate people's court decided to approve the reorganization plan, the *ST company entered into the reorganization plan, and the company was responsible for carrying out the reorganization plan, and the manager was responsible for supervising the implementation of the reorganization plan.

On the same day, *ST Zhong Rong announced that the second creditors' meeting of the company passed the "reorganization plan (Draft)". The shareholders attending the investor group meeting also passed the "investor rights adjustment program" and made substantial progress in the reorganization of listed companies.

A large number of debts failed to be paid off, and *ST's Velvet was applied for reorganization by creditors. According to the review of the creditor's rights, the total amount of the company's claims is confirmed to be 8 billion 368 million yuan, and the amount of the claim is suspended for 2 billion 427 million yuan. The company intends to increase its capital stock by about 2 billion 457 million shares.

According to the draft reorganization issued by *ST, according to the declaration of creditor's rights, as of October 29, 2019, a total of 159 creditors declared 168 claims to the manager, and the total amount of claims was 11 billion yuan. However, according to the manager's review, the total amount of *ST's middle duty claims is 8 billion 368 million yuan. In addition, the amount of claim declared by the manager is uncertain, which is 2 billion 427 million yuan.

The draft shows that the total value of *ST's pile assets, including monetary funds, external receivable claims and fixed assets, is 3 billion 944 million yuan, which is not enough to repay all debts.

According to the reorganization plan, the *ST cashmere reorganization fund is derived from the disposal of property. If it is insufficient, it will be supplemented by the implementation of the capital reserve fund. The manager launched a public auction of disposing assets in August this year, but the five round of auctions were rap. The auction price of the fifth round of disposal of assets was 1 billion yuan.

*ST Zhong Rong said that it would increase about 2 billion 457 million shares of the stock through the capital reserve fund, of which about 981 million shares were disposed of by the manager. The disposal of shares would give priority to the cost of restructuring and the liquidation of all kinds of debts. The remaining part would be used to improve the operating capacity of listed companies, and the remaining 1 billion 476 million shares would be used to compensate debts.

The adjustment plan shows that the creditor's rights of each creditor less than 500 thousand yuan will receive a full cash settlement, and more than 500 thousand yuan will be paid back to the capital reserve fund and the debt price will be 5.87 yuan per share. At this price, the maximum debt can be compensated by changing the stock by 8 billion 664 million yuan.

*ST Zhong Rong said in the announcement that the company's future operation will take the return of cashmere's main industry as a strategic fulcrum, rectify the resource mismatch, and reshape the core competitiveness of the company's industry. After completing the divestiture, it became a light asset operation listed company providing supply chain service for cashmere textile industry.