The dilemma of St Steel is becoming more and more impossible to conceal
- Feb 03, 2018 -

After 2 consecutive years of negative net profit after the implementation of the risk of delisting, planning restructuring nearly 1 years after the failure, St heavy Steel (601005) The dilemma is increasingly unable to cover up.

May 10 Night, St Heavy Steel issued a notice, the company recently received the Chongqing Arbitration Commission (2017) Yu-Zhong letter No. 706 to participate in the arbitration notice, the applicant Chongqing blasting Engineering Construction Co., Ltd. (hereinafter "Chongqing blasting" With the applicant Chongqing Iron and Steel Co., Ltd. construction project contract dispute case has been accepted by the Arbitration Commission.

According to St heavy steel on the above cases, the contract between the two companies signed on March 20, 2012, August 5, 2014 completed the settlement audit, audited settlement cost of 75.84 million yuan. Up to now, St heavy Steel has not paid the balance of the project is 16.37 million yuan.

It is noteworthy that the day before, that is, on the evening of May 9, St Heavy Steel also issued a major litigation matters notice. Recently, the Zhongqing first Intermediate People's Court has accepted the plaintiff Chongqing Yu-Shang Renewable Resources Development Co., Ltd. (hereinafter referred to as "Chongqing Yu Shang") and the defendant Chongqing Iron and Steel Co., Ltd. sale contract dispute case. The announcement indicated that St heavy steel to Chongqing Yu Merchant's outstanding balance is 95.89 million yuan, the arrears mainly comes from the product purchase and sale.

This means that St heavy steel has been recovered after the arrears of more than 100 million yuan. In addition to the recent two public lawsuits, St Heavy Steel has suffered 3 major lawsuits and arbitrations in 2017. Prior to April 21, steel has not yet been wearing a hat, Zhongqing Changshou District People's court has received the plaintiff Taiyuan Heavy Industry Co., Ltd. (hereinafter referred to as "Taiyuan Heavy Industry") and the defendant Zoomlion material conveying Equipment Co., Ltd. (hereinafter referred to as "zoomlion materials"), Chongqing Iron and Steel Co., Ltd. contract dispute case, Chongqing Iron and Steel case involved 12.147 million yuan payment.

St Heavy Steel Parent company Chongqing Iron and Steel (group) Limited Liability company (hereinafter called "Heavy Steel Group") is Zhongqing's largest iron group, is a century-long history of the large-scale joint venture, its predecessor for the 1890 Qing government founded Hanyang Ironworks.

Look at the annual performance report of St heavy Steel, 2010 net profit of 10 million yuan, excluding non-recurrent profit and loss after the net profit of 25.84 million yuan, the current government subsidy of 10.71 million yuan, Free use of heavy steel group related assets 153 million yuan, 2011 net profit-1.471 billion yuan, 2012 net profit of 98.81 million yuan, after the non-recurrent profit and loss after the net profit of 1.868 billion yuan, the current government subsidy amounted to 2 billion yuan; 2013 net profit is 2.499 billion yuan; 2014 net profit is 51.43 million yuan, buckle Unless the regular profit and loss after the net profit is-2.536 billion yuan, the current government subsidy of 923 million yuan, 2015 net profit-5.987 billion yuan, excluding non-recurrent profit and loss after the net profit is 9.3 billion yuan, the current government subsidy amounted to 969 million yuan. 2016 net profit-4.686 billion yuan.

In other words, nearly two years of losses of St heavy Steel, without local government subsidies, should have been in the hat 5 years ago.

At a time of distress, St Steel had once hoped to restructure and prepare for "a change in finance".

St heavy Steel suspended from June 2, 2016, the reason is Chongqing SASAC planning major issues. Since August 30, the reorganization of the object surfaced, St heavy Steel and the controlling shareholder of Chongqing Chongqing Yu Fu Holdings (Yu-Fu Holdings holdings of Yu-fu group 100%) signed the "Major asset restructuring framework agreement."

According to the previous announcement, the reorganization Framework programme will contain at least two main elements: St heavy steel to sell the relevant assets, and to acquire the integrated Chongqing-rich group involved in financial, industrial investment and other areas of high-quality assets. The actual control of Yu-fu group is Chongqing Sasac.

However, in the evening of May 2, the suspension of nearly a year St heavy steel issued a notice that the suspension of the major assets reorganization matters.

The reasons given by St Steel include, on the one hand, the major asset restructuring program is more complex, the proposed to set out the assets involved in the large scale of debt, many creditors, involved in litigation debt complex, through communication with creditors, the company has not yet agreed on the restructuring of the main creditors; The main assets of Yu-fu group, which are intended to be placed, are related to regulatory policy requirements, under the current supervision policy, the proposed asset scheme is difficult to meet the regulatory requirements both inside and outside, and the approval and operating procedures involved in asset stripping are complicated, which require the supervision and approval of the State-owned Assets Supervision and management department, financial and Securities industry competent departments, etc. and related to the information disclosure of listed companies work. According to the relevant regulations and requirements of major assets reorganization, it is expected that this reorganization will be difficult to reach agreement with relevant parties on the reorganization plan and disclose major assets reorganization plan within the stipulated time.

At this point, St heavy Steel took nearly a year of reorganization formally declared terminated. After the reorganization failure, St heavy steel or face reorganization destiny.

Prior to April 24, St Heavy Steel received the creditor Chongqing to Source Trade Co., Ltd. (hereinafter referred to as "to the source of the company") issued the "notice", to the source company to the company can not pay off its due debt and assets are not sufficient to pay off all debts, to the first Intermediate People's Court Zhongqing

St Heavy Steel Parent company of Heavy Steel group was held on May 2, the Board of directors on the St heavy steel by creditors to apply for reorganization matters carried out a special study, at the same time to Chongqing Sasac reported. Heavy steel Group also said that understanding and support St heavy steel to restructure.