QIDIAN GUOFENG plans to sell all the equity of Yangzhou Laihao Electrical Appliance Trading to Guangdong Shengrong for RMB 29.3 million to settle the outstanding principal of the loan
QIDIAN GUOFENG plans to sell all the equity of Yangzhou Laihao Electric Appliance Trading to Guangdong Shengrong to settle the outstanding principal of the loan. The transaction cost is RMB 29.3 million, which will be used to offset the outstanding principal and accrued interest under the loan agreement. After the completion of the transaction, QIDIAN GUOFENG will reduce its financial burden and lower its debt-to-asset ratio. According to the equity transfer agreement, the outstanding amount of approximately RMB 12.6132 million must be repaid by June 13, 2025
According to the news from Zhitong Finance APP, QIDIAN GUOFENG (01280) announced that its indirect wholly-owned subsidiary, Beijing Qidian, owes Guangdong Shengrong RMB 45 million in principal. The amount is guaranteed and bears interest at an annual rate of 5%, with repayment due on April 18, 2024, after negotiation between the contracting parties. On June 19, 2024, Beijing Qidian (as the seller) entered into a share transfer agreement with Guangdong Shengrong (as the buyer), selling all the issued shares of Yangzhou Laihao Electrical Appliance Trading Co., Ltd. for RMB 29.3 million.
The consideration of RMB 29.3 million under the share transfer agreement must first offset the outstanding principal under the loan agreement, followed by the outstanding accrued interest. Upon completion of the sale under the share transfer agreement, the outstanding principal under the loan agreement will be fully settled. The remaining outstanding amount of approximately RMB 12.6132 million (i.e., the outstanding accrued interest under the loan agreement as of the date of the share transfer agreement) should be repaid by Beijing Qidian before June 13, 2025.
Given the Group's financial condition, the proposed sale under the share transfer agreement, which is intended to partially settle the outstanding amount under the loan agreement, will reduce the Group's debt-to-asset ratio. Fully settling the outstanding principal under the loan agreement will alleviate the financial burden of interest payments for the company under the loan agreement
