Stock：WazhouB Code：200706 No.：2019-06 Wafangdian Bearing Company Limited
Announcement Relating to Debt Reorganizations During Normal Operation of Business Involving Partial Related Transactions
The Company, all the members of the Board of Directors, supervisors and top management hereby guarantee the truth, accuracy and completeness of the information disclosure, no any false records, misleading statements and major missing contents.
I. Overview of debt restructuring
1. Earnings from debt restructuring
In order to optimize the corporate debt structure and improve the efficiency of fund use, Wafangdian Bearing Company Limited (hereinafter referred to as “the Company”) carried out clean-up work on the payables of the daily operations of the company from July to December 2018. During this period, the Company signed the “Debt Restructuring Agreement” with 31 suppliers including ZWZ Bearing Precision Forging Co., Ltd. and Bejing Ao Bao Ao Diamond Technology Co., Ltd. After friendly negotiation, the suppliers of this part agreed to make concessions on theCompany’s daily operating debt, and the above-mentioned business achieved debt restructuring income of 4,016,620.91 Yuan for the Company; 2. Debt restructuring loss
1）Debt restructuring losses confirmed by both parties
The company has signed the Debt Restructuring Agreement with ZWZ Bearing Precision Forging Co., LTD and Shenhua Wuhai energy Co., LTD. After friendly negotiation, the company made concessions to the bearing receivables owed by United Power to the Company, and the above-mentioned business made debt restructuring losses of 730,889.89Yuan for the Company.
2）Debt restructuring losses due to customer bankruptcy reorganization
(1) Due to the bankruptcy reorganization of Chongqing Iron and Steel Co., LTD., the company's customer, the receivable bearing payment could not be fully recovered, resulting in a debt restructuring loss of 478,411.65 yuan. The details are as follows:
Chongqing Iron and Steel Co., LTD. owes the company the payment for goods before its reorganization, our company declared and confirmed the creditor's right by the manager of the other party is 1,463,605.27 yuan.The settlement scheme of ordinary creditor's rights in chongqing iron and steel reorganization plan is as follows: the creditor's rights under 500,000 yuan (including 500,000 yuan) of each ordinary creditor shall be settled in cash in100% proportion; The remaining amount of 963,605.28 yuan is settled in the form of debt exchange for shares according to the settlement ratio of58.844978%, namely963,605.28*58.844978%=567,033.3037 yuan. This part of chongqing iron and steel is priced at 3.68 yuan per share, so it is equivalent to 154,086 shares.
(2) According to the debt restructuring plan of the Bohai Steel Group (Bohai Steel Group is the name of the 48 enterprises including the Bohai Steel Group, Tiangang Group, Tiantie Group and Metallurgical group entering the restructuring process). The company's receivable amount of RMB 3,003,766.92 will be paid off through cash, debt-for-equity swap and beneficial share of the trust. According to the restructuring plan of the bohai steel group enterprise, the specific settlement plan of the company is as follows: RMB 500,000 cash settlement; Of the accounts receivable exceeding 500,000 yuan or more, 1,301,958.80 yuan was liquidated through debt-for-equity swaps of about52% on the steel asset platform (Current Bohai Steel Group). 1, 2010,808.12 yuan shall be paid off by about48% of the beneficial right share of the trust
Stock：WazhouB Code：200706 No.：2019-06 on the non-steel asset platform (The predecessor Bohai Steel Group).
The above businesses have a total impact on the company's current profit and loss of 2,807,319.37 yuan in 2018. The impact of debt restructuring on the company's profit and loss of Bohai Steel Group will be included in the year 2019 and beyond. The specific amount is not yet determined, which shall be determined according to the operation of the platform on which the debt-for-equity swap and trust investment part are based.
3. Because 7 suppliers including ZWZ Bearing Precision Forging Co., LTD. and 1 customer are the wholly-owned subsidiary of the company's largest shareholder, transactions involving this part constitute affiliated transactions.
4. The proposal was reviewed and unanimously approved by the 9th meeting of the seventh board of directors of the company. When the consideration involving related transactions, the related directors, Meng Wei, Sun Maolin, Zhao Yang, Zhang Xinghai, Chen Jiajun and Sun Najuan, avoided the consideration, other directors all voted yes for this matter, there was no negative vote nor abstention vote. The independent directors of the company issued an independentdirectors’ opinion on this matter.
5. According to Article 10.2.5 of the Stock Listing Rules of the Shenzhen Stock Exchange:Transactions between a listed company and its affiliates (other than cash assets and guarantees granted to the listed company) amount to more than RMB 30 million,and related party transactions accounting for more than5% of the absolute value of the audited net assets of the listed company in the latest period,In addition to timely disclosure, it shall, in accordance with the provisions of article 9.7 of these rules, employ intermediaries qualified to engage in securities and futures related businesses to evaluate or audit the subject matter of a transaction and submit the transaction to the general meeting of shareholders for review.The amount involved in this affiliated debt restructuring is more than 30 million yuan, and accounts for5.35% of the company's latest audited net capital, so it needs to be submitted to the shareholders' meeting for review and approval.
Therefore, the transaction object involved in this business is the related transaction related to daily operations mentioned in article 10.2.11 of the "rules on stock listing", so it can be exempted from consideration or evaluation.
This business does not constitute the material assets reorganization stipulated in the measures for the administration of material reorganization of listed companies.
6. This debt restructuring is a debt restructuring of the nature of daily operation, there is no major legal obstacles in the implementation of each party.
II The basic situation of the debt restructuring party
1. There are a total of 31 suppliers and 4 customers involved in this debt restructuring. The debt restructuring that the company agreed with the related parties and the debt restructuring that the company agreed with the third-party suppliers are independent and are not eachother’s premise, and do not constitute one package deal.
2. There is no possibility that the debt restructuring party has other relationships with the company and the top ten shareholders of the company in the property rights, business, assets, credit and debt, personnel, etc. which may or may have caused the company to incline to its interests or caused it to incline to thecompany’s interests. The company carries through all the debt restructuring in a fair, just and non-discriminatory manner. Among them, the basic situation of the top two suppliers involving the larger amount is as follows:
Stock：WazhouB Code：200706 No.：2019-06 (i) ZWZ Precision Forging Co., Ltd.
1. Type of Enterprise: Limited Liability Company
2. Enterprise Address: No.1, Section 1, Beigongji Street, Wafangdian City, Liaoning Province
3. Legal Representative: Wang Longjie
4. Registered Capital: 24.45 million Yuan
5. Date of Establishment: June 16, 2004
6. Business Scope: forging products processing, mechanical parts processing; forging equipment maintenance; forging annealing; forging process design; sales of metal materials
7. Main financial indicators as of December 31, 2018: total assets of 466,159,000Yuan, total liabilities of 308,497,400Yuan, net assets of 157,661,600Yuan; on December 31, 2018, accumulated operating income of 522,237,600Yuan, and net profit of 6,472,500Yuan.
8. Not the dishonest person subjected to execution
(ii) Wafangdian Bearing Group Windpower Bearing Co., Ltd.
1. Type of Enterprise: Limited Liability Company
2. Enterprise Address: No.1, Section 1, Beigongji Street, Wafangdian City, Liaoning Province
3. Legal Representative: Zhang Xinghai
4. Registered Capital: 200 million Yuan
5. Date of Establishment: June 13, 2007
6. Business Scope: bearing manufacturing and sales; housing and mechanical equipment leasing; import and export of goods and technology; research and development and information of windpower bearing technology; operation and maintenance of wind turbines (except for projects prohibited by laws and administrative regulations; projects restricted by laws and administrative regulations can be operated after obtaining the license) (Projects subject to approval according to law can be carried out after approval by relevant departments)
7. Main financial indicators as of December 31, 2018: total assets of 933,644,100Yuan, total liabilities of 522,205,900Yuan, net assets of 411,438,200Yuan; on December 31, 2018, accumulated operating income of 264,891,700Yuan, and net profit of -2,095,500Yuan.
8. Not the dishonest person subjected to execution
(III) Wafangdian Bearing Precision Rolling Element Co., Ltd.
1. Type of Enterprise: Limited Liability Company
2. Enterprise Address: No.1, Section 1, Beigongji Street, Wafangdian City, Liaoning Province
3. Legal Representative: Zhang Shiyin
4. Registered Capital: 20 million Yuan
5. Date of Establishment: September 1, 2016
6.Business Scope:Rolling body design, manufacturing and sales, housing, equipment rental (Projects subject to approval according to law can be carried out after approval by relevant departments)
7.Main financial indexes as of December 31, 2018: total assets: 86,368,000yuan, total liabilities: 119,217,100yuan, net assets:-32,849,100yuan; On December 31, 2018, the accumulated operating income was185,973,800yuan, and the net profit was -22,031,500 yuan.
8. Not the dishonest person subjected to execution
Stock：WazhouB Code：200706 No.：2019-06 (IV) Dalian Wafangdian Bearing Group Bearing Equipment Manufacturing Co., Ltd.
1. Type of Enterprise: Limited Liability Company
2. Enterprise Address: No.1, Section 1, Beigongji Street, Wafangdian City, Liaoning Province
3. Legal Representative: Chen Jiajun
4. Registered Capital: 16.736 million Yuan
5. Date of Establishment: June 14, 1996
6.Business Scope:Manufacture, transformation and maintenance of bearing equipment and various spare parts; Automation line engineering manufacture; Various machining equipment and maintenance; Manufacture and maintenance of bearing molds, measuring tools, cutting tools and instruments; Various types of CNC rotary table manufacturing; Electrical engineering construction, pipeline engineering construction and maintenance, industrial building lighting; Installation and maintenance of hydropower projects, and maintenance of buildings (if the above qualifications are involved, operating on the certificate of assets); installation and maintenance of construction machinery; Installation of various equipment; Various kinds of riveting welding processing.(Projects subject to approval according to law can be carried out after approval by relevant departments)
7.Main financial indicators as of December 31, 2018:Total assets were 91,120,600yuan, total liabilities were 60,097,100yuan and net assets were 31,023,500yuan. On December 31, 2018, the accumulated operating income was 40,717,500yuan and the net profit was -6,296,900yuan.
8. Not the dishonest person subjected to execution
(V)Wafangdian Bearing Precision Cage Co., Ltd.
1. Type of Enterprise: Limited Liability Company
2. Enterprise Address: No.1, Section 1, Beigongji Street, Wafangdian City, Liaoning Province
3. Legal Representative: Zhang Shiyin
4. Registered Capital: 10 million Yuan
5. Date of Establishment: September 1, 2016
6.Business Scope:Maintenance rack design, manufacturing and sales, housing, equipment rental (Projects subject to approval according to law can be carried out after approval by relevant departments)
7.Main financial indexes as of December 31, 2018: total assets of 30,447,100yuan, total liabilities of 29,435,600yuan, net assets of 1,011,500yuan; On December 31, 2018, the accumulated operating income was 70,009,900yuan and the net profit was -4,141,200yuan.
8. Not the dishonest person subjected to execution
(VI)Wafangdian Tongda Bearing Manufacturing Co., Ltd.
1. Type of Enterprise: Limited Liability Company
2. Enterprise Address: No.1, Section 1, Beigongji Street, Wafangdian City, Liaoning Province
3. Legal Representative: Sun Maolin
4. Registered Capital: 3.2 million Yuan
5. Date of Establishment: January 1, 1985
6.Business Scope:Bearing manufacture and repair; Manufacturing of plastic packaging bags, knitting gloves, mechanical processing and distribution (For items subject to approval according to law, business activities can only be carried out after approval by relevant departments)
7.Main financial indexes as of December 31, 2018: total assets:107,285,800yuan, total liabilities:
Stock：WazhouB Code：200706 No.：2019-06 43,598,700 yuan, net assets:63,687,100 yuan; On December 31, 2018, the accumulated operating income was155,675,600yuan and the net profit was 4,306,800yuan.
8. Not the dishonest person subjected to execution
(VII)Wafangdian Bearing Group Enginering Technology Research Center Co., Ltd.
1. Type of Enterprise: Limited Liability Company
2. Enterprise Address: Bearing industrial park, Wafangdian City, Liaoning Province
3. Legal Representative: Wang Longjie
4. Registered Capital: 10 million Yuan
5. Date of Establishment: April 2, 2014
6.Business Scope:Bearing product design, process design, testing, computer application development, bearing special machine development design, scientific research consulting services(Projects subject to approval according to law can be carried out after approval by relevant departments)
7.Main financial indicators as of December 31, 2018: Total assets amounted to 57,113,900 yuan, total liabilities amounted to 45,602,900yuan and net assets amounted to 11,511,000yuan. On December 31, 2018, the accumulated operating income was 24,125,600yuan and the net profit was -1,531,500 yuan. 8. Not the dishonest person subjected to execution
(VIII) Wafangdian Bearing Group High-end Automobile Bearing Co., LTD
1. Type of Enterprise: Limited Liability Company
2. Enterprise Address: No.1, Section 1, Beigongji Street, Wafangdian City, Liaoning Province
3. Legal Representative: Meng Wei
4. Registered Capital: 68 million Yuan
5. Date of Establishment: October 13, 2015
6.Business Scope:Bearing design and development, manufacturing, marketing; Import and export of goods and technologies(Projects subject to approval according to law can be carried out after approval by relevant departments)
7.Main financial indexes as of December 31, 2018: total assets: 431,240,700yuan, total liabilities: 468,378,300 yuan, net assets:-37,137,600yuan; On December 31, 2018, the accumulated operating income was 550,014,800yuan and the net profit was -64,526,300yuan.
8. Not the dishonest person subjected to execution
III Debt restructuring plan and the main contents of debt restructuring agreement
1. Debt formation
Accounting by the company and the financial personnel of 31 suppliers, the Company should pay the purchase payments and project funds for a total of RMB84,804,773.68 Yuan to the above-mentioned suppliers.
After accounting with the financial staff of 4 customers, the Company shall receive the bearing payment of RMB17,654,419.65 yuan from the above-mentioned customers.Chongqing Iron and Steel Co., LTD. Bankruptcy reorganization, receivable bearing 1,463,605.27 yuan can not be fully recovered; Debt restructuring of Bohai Steel Group Co., LTD. The company's receivable amount of RMB 3,003,766.92yuan will be paid off through cash, debt-for-equity swap and beneficial share of the trust.
Stock：WazhouB Code：200706 No.：2019-06 2. Main contents of the debt restructuring plan
After communicating and negotiating with the creditors, according to the Debt Restructuring Agreement respectively signed by the Company and 31 suppliers, in line with the principle of mutually beneficial cooperation, the creditors agreed to abandon thecreditor’s rights of part of the payment for goods, and the remaining payment could be paid to the creditors by the company in the form of commercial papers and bank deposits. After the creditors received the payment, the credit and debt of both parties involved in the contract are settled, and there are no other economic disputes.
From July to December 2018, the company completed debt restructuring with 84,804,773.68 yuan, and actually paid 80,785,018.80 yuan for goods, realizing debt restructuring income of 4,016,620.91 yuan. After the communication and negotiation between the debtor and the company, according to the "Debt Restructuring Agreement" signed by the company and three customers, in line with the principle of cooperation and reciprocity, the company agrees to give up the creditor's rights of part of the bearing amount. From July to December, 2018, the company completed the debt restructuring with 17,176,008.00 yuan, and actually received 16,445,118.11 yuan of payment for goods, resulting in a debt restructuring loss of 730,889.89 yuan.
After the bankruptcy reorganization of Chongqing Iron and Steel Co., LTD., the company shall deduct the 500,000 yuan paid to the company according to the reorganization plan and pay off 567,033.3037 yuan in the form of shares and debts, resulting in a debt restructuring loss of 478,411.65 yuan.
The debt of the Bohai Steel Group enterprise is restructured. The company's receivable amount of RMB 3,003,766.92 yuan shall be paid off through cash, debt-for-equity swap and beneficial share of the trust. Of the accounts receivable exceeding 500,000 yuan or more, 1,301,958.80 yuan was liquidated through debt-for-equity swaps of about52% on the steel asset platform (Current Bohai Steel Group). 1, 2010,808.12 yuan shall be paid off by about48% of the beneficial right share of the trust on the non-steel asset platform (The predecessor Bohai Steel Group). The specific amount of the company's profit and loss is still uncertain, which needs to be determined according to the operation of the platform on which the debt-for-equity swap and trust investment part are based.
3. There is no case involving underlying assets such as repaying debts with non-cash assets in this debt restructuring.
IV Other arrangements for debt restructuring
This debt restructuring does not involve follow-up arrangements such as personnel placement, land lease, related transactions, horizontal competition and so on.
V The reason,purpose of debt restructuring and its impact on the company
Debt restructuring of the main causes of it is due to the influence of market environment, enterprises in the short term capital relatively nervous, in order to alleviate the pressure of the capital, agreed with the supplier, in the levy, a percentage of the down payment, the determination of the discount is related in their business, both sides can withstand range determined by negotiation;Second, due to the bankruptcy reorganization of customers, from the perspective of maximizing the interests of the maintenance company, accepted receivables collection program.Except for the content of the reorganization agreement, there are no other agreements and arrangements not disclosed. Debt restructuring involving related parties shall not be treated as an equity transaction.
The subsequent payment arrangement will be made by the Company taking into account (i) the amount
Stock：WazhouB Code：200706 No.：2019-06 owed to the suppliers as of the settlement period; (ii)actual collection of capital of the Company during the period. The capital is mainly sourced from the actual capital collected by the Company from sales of bearing products, which belongs to normal capital payment business, thus brings no impact on theCompany’s normal operation.
Through debt restructuring, the company further sorted out its credit and debt relationship, relieved the capital pressure, eased thecompany’s debt burden, optimized the debt structure, improved thecompany’ s financial status, and helped thecompany’s business development.
According to the relevant provisions of the Accounting Standards for Business Enterprises, the income of RMB2,807,319.37yuan from this debt restructuring will be included in non-operating income.
VI Documents for reference
1. Board Resolution.
2. Resolution of the Board of Supervisors.
3. Independentdirector’s opinion.
4. Other documents required by the Shenzhen Stock Exchange.
Hereby notified
Board of director of Wafangdian bearing
Company limited
April 29. 2019