On the evening of July 1, Shanghai New Power Automobile Technology Co., Ltd. (Power Xinke) (600841) announced that Chongqing Anji Hongyan Logistics Co., Ltd. (hereinafter referred to as “Chongqing Anji Logistics”), a creditor of its wholly-owned subsidiary SAIC Hongyan Automobile Co., Ltd. (hereinafter referred to as “SAIC Hongyan”), applied to the Chongqing Fifth Intermediate People’s Court for bankruptcy reorganization on the grounds that SAIC Hongyan could not pay off its debts due and was seriously insolvent but still had the value of reorganization and the feasibility of reorganization.
The impact of SAIC Hongyan’s application for reorganization
For this wholly-owned subsidiary or application for reorganization, Power Xinke said:
SAIC Hongyan is an important subsidiary of the company and a production and operation platform for the heavy truck business, and if the reorganization is successfully implemented, it will help resolve SAIC Hongyan’s debt and alleviate the company’s operating pressure.
Although the applicant’s bankruptcy reorganization application has been filed by the court, there is still uncertainty about whether SAIC Hongyan will be ruled to enter the reorganization process. Even if the court rules that SAIC Hongyan has entered the reorganization process, it does not mean that SAIC Hongyan’s reorganization is successful, and there is uncertainty about whether SAIC Hongyan can be successfully reorganized.
The company will disclose the progress of relevant matters in a timely manner, and regardless of whether SAIC Hongyan can enter the reorganization process, the company will urge SAIC Hongyan to actively do a good job in daily production, operation and management on the existing basis.
Power Xinke said that whether SAIC Hongyan can enter the restructuring process will not have a significant impact on the company’s non-heavy truck business.
Opinions of the board of directors of Power Xinke
According to the relevant provisions of the Enterprise Bankruptcy Law of the People’s Republic of China, when the debtor cannot pay off the debts due and the assets are insufficient to pay off all the debts, but have reorganization value, the creditor has the right to apply to the court for reorganization of the debtor in accordance with the law. The reorganization procedure is different from the bankruptcy liquidation procedure, which aims to save the debtor, retain the debtor’s legal entity and restore sustainable profitability.
During the court’s review of the case, the company will cooperate with the court to study and demonstrate the feasibility of SAIC Hongyan’s reorganization in accordance with the law. If the court rules that SAIC Hongyan has entered the reorganization process, the company will exercise its shareholder rights in accordance with the law, actively cooperate with the reorganization work of the court and the administrator, and urge SAIC Hongyan to perform its legal obligations in accordance with the law. On the premise of balancing and protecting the legitimate rights and interests of all parties, the company will actively demonstrate the solution to the debt problem with all parties, and will actively seek the support of relevant parties to protect the interests of the company and all shareholders to the greatest extent.
Additional notes and risk warnings
1. As of the date of this announcement, the company and SAIC Hongyan have not received the legal documents and relevant notification letters from the court on the acceptance of the creditor’s application for the reorganization of SAIC Hongyan, and there is still uncertainty about whether SAIC Hongyan will be ruled to enter the reorganization process.
2. SAIC Hongyan is an important subsidiary of the company and a production and operation platform for heavy truck business, and its reorganization has a significant impact on the company. If SAIC Hongyan’s restructuring is successfully implemented, it will help resolve SAIC Hongyan’s debt. Although the applicant’s bankruptcy reorganization application has been filed by the court, there is still uncertainty about whether SAIC Hongyan will be ruled to enter the reorganization process. Even if the court rules that SAIC Hongyan has entered the reorganization process, it does not mean that SAIC Hongyan’s reorganization is successful, and there is uncertainty about whether SAIC Hongyan can be successfully reorganized.
Power Xinke said. Regardless of whether SAIC Hongyan can enter the reorganization process, the company will urge SAIC Hongyan to actively do a good job in daily production, operation and management on the existing basis, and will continue to pay attention to the progress of SAIC Hongyan’s reorganization matters and fulfill its information disclosure obligations in a timely manner in accordance with relevant regulations.
