Chenming Paper announced that in order to actively and steadily reduce the company's asset-liability ratio, optimize the capital structure, and enhance the company's overall capital strength, the company's wholly-owned subsidiary, Jiangxi Chenming, intends to conduct market-oriented legalized debt-to-equity swap business with Zheshang Bank. The Western Trust, a cooperative implementing agency of Zheshang Bank, increased the capital of Jiangxi Chenming with an increase of RMB 500 million. Based on the operation status of Jiangxi Chenming and the overall strategic considerations of the company, Jiangxi Chenming Shareholder Chenming Paper and the company's wholly-owned subsidiary Hong Kong Chenming will abandon the corresponding priority of the capital contribution in this capital increase.
After the capital increase, the Western Trust held a 16.75% stake in Jiangxi Chenming. Of this, RMB 410 million was included in the share capital, and the remaining RMB 88.885 million was included in the capital reserve. After receiving the equity investment, Jiangxi Chenming used the funds to repay the shareholders' loan of Chenming Group.
The announcement said that the company actively responded to the national policy orientation and strived for opportunities to market debt-to-equity swaps. Zheshang Bank will increase the company's debt scale, reduce the company's overall debt ratio, optimize the capital structure, and further improve the company's anti-risk ability and profitability through the cooperative implementation of the Western Trust to Jiangxi Chenming. This is in line with the company's long-term development strategy and overall. The interests of shareholders. After the completion of this capital increase, Jiangxi Chenming is still a holding subsidiary of the company. This capital increase will not cause the company to lose control of Jiangxi Chenming and has no significant impact on the company's financial status and operating results.
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