The board of ST Yuncheng has approved a new debt disposal plan for exiting Qicai Company, under which it intends to accept a combination of 224 million yuan in debt assets from Fengyu Company and property of equivalent value from Qicai Company to offset the remaining compensation. Previously, the company exited Qicai Company through targeted capital reduction and shareholder compensation, with an overall transaction consideration of 293 million yuan, of which Fengyu Company and Qingfeng Company were required to pay 224 million yuan in compensation, but as of July 20 only part of the amount had been paid in cash. Under the new plan, Fengyu Company will use its 224 million yuan claim against Qicai Company that has already fallen due to offset the same amount of compensation, while Qicai Company will use assets from the Ancient Dian Future City project in Jinning District, Kunming, which it developed, to settle the debt, covering a total area of 48,400 square meters. Any shortfall will be made up by Qicai Company in cash, and Fengyu Company and Qingfeng Company will provide joint and several liability guarantees. Within 30 days after the agreement takes effect, the parties must complete signing of the property sale and purchase contract for the debt settlement, online signing and filing, and issue special value-added tax invoices for the equivalent amount. After ST Yuncheng obtains all real estate title certificates, the corresponding claims will be deemed fully settled. The company believes this plan can ensure timely recovery of the remaining compensation receivable, but cautions that risks of impairment and gains or losses upon subsequent holding and disposal of the assets still remain.
Yunnan Metropolitan Real Estate Development Co LtdDebt settlement plan may recover compensation but risks asset impairment
Qingfeng provides guarantee, impact depends on settlement outcome
