CHINA HUARONG ENERGY CO LTD (19 November 2015, Hong Kong) - China Huarong Energy Company Limited ('Huarong Energy', the 'Company' or 'We', and together with its subsidiaries, the 'Group'; stock code: 01101.HK) is pleased to announce that, the Company entered into conditional letters of intent (the 'Letters of Intent') in relation to the disposal of liabilities and other related matters with each of more than 10 major institutional creditors today, pursuant to which, the Company and the institutional creditors agreed that, amongst other things, the entire or partial amount of borrowings of the institutional creditors owed by the Company and the Company's shipbuilding segment subsidiaries and its related companies will be settled through an issuance of shares of the Company to the relevant institutional creditors or its designated related companies by the Company in order to satisfy the liabilities (the 'Disposal of Liabilities').
With the support of the government authorities, through friendly negotiations, the Company and the relevant financial institutions are accelerating the implementation of and promoting a material asset reorganisation and optimised debt restructuring proposal of Jiangsu Rongsheng Heavy Industries and the proposal has been affirmed by relevant parties.
The Board believes that the Disposal of Liabilities would accelerate and facilitate the progress of negotiation of the Potential Restructuring by easing the debt burden of the Group and enlarging the equity base of the Company. By easing the debt burden of the Group, the Company could enhance the flexibility of fund utilisation and improve the operation of shipbuilding business and also mitigate the adverse effect of the high gearing of the Group on its expansion in the energy service industry, in order to better implement the strategy of industry transformation and steadily develop the energy development business of the Group.
The Disposal of Liabilities involves, namely, Nantong Rongye Storage Co., Ltd. (南通熔燁倉 儲有限公司), Jiangsu Rongsheng Heavy Industries Co., Ltd. (江蘇熔盛重工有限公司), Jiangsu Rongsheng Shipbuilding Co., Ltd. (江蘇熔盛造船有限公司), Shanghai Rongsheng Shipbuilding Trading Company Limited (上海熔盛船舶貿易有限公司), Hefei Rong An Power Machinery Co., Ltd. (合肥熔安動力機械有限公司), Rongsheng Machinery Company Limited (熔盛機械有限公司) and Hefei Zhenyu Engineering Machinery Company Limited (合肥振宇 工程機械有限公司). All the relevant institutional creditors are third parties independent of the
Company and its connected persons.
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Huarong Energy Entered into Letters of Intent with More Than 10 Institutional Creditors
19 November 2015 / P.2
The content contained in the Letters of Intent does not represent the entire terms and conditions of the Disposal of Liabilities, the parties are entitled to negotiate the Disposal of Liabilities. The terms of the Disposal of Liabilities are subject to the legally binding formal agreement(s) to be finally entered into.
Save for the clauses on confidentiality and governing law, the Letters of Intent are not legally binding on the parties thereto and do not constitute the parties' legally binding commitment in respect of entering into formal agreement(s) or proceeding with the Disposal of Liabilities. In the event formal agreement(s) is/are entered into, the Company will make further announcement(s) and seek shareholder's approval and comply with the Listing Rules or other relevant requirements.
The negotiations of the Potential Restructuring are still ongoing. The Company will continue to closely monitor the status of the Potential Restructuring and the Disposal of Liabilities and will make further announcement(s) on any material development in a timely manner as and when necessary in accordance with the Listing Rules and relevant legal or regulatory requirements.
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Mr. Michael Cheng | Tel: (852) 3900 1822 | Email: michaelcheng@rshi.cn |
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