C.banner (01028.HK) announced a very significant sale of the entire issued share capital of Intime Retail (Group) Company Limited ("Intime").

The company (as the seller) and Huaxin Venture Capital Co., Ltd. (as the buyer) have entered into a share purchase agreement dated June 18, 2020, for the purchase and sale of all issued shares in Intime. The company, Xuzhou C.banner, Meihong Footwear and Nanjing Meilihua have also entered into a framework agreement for debt restructuring.

Under the framework agreement for debt restructuring, Nanjing Meilihua is obligated to repay several trade debts that arose during the regular course of business while Nanjing Meilihua was still a subsidiary of the group to Xuzhou C.banner. The trade debts were originally scheduled to be fully repaid by May 31, 2022. With the consent of Xuzhou C.banner through two extension letters dated March 10, 2022 and February 10, 2023, the repayment deadline for the trade debts was allowed to be extended to May 31, 2024.

As disclosed in the annual report for the year ended December 31, 2023 of the company, as at December 31, 2023, trade debts with a book amount (discounted for time value) of approximately RMB 210,999,000 yuan were still outstanding and were to be repaid by Nanjing Meilihua to Xuzhou C.banner.

As of the date of the announcement, Nanjing Meilihua failed to repay trade debts in the total principal amount of approximately RMB 214,921,000 yuan (as of May 31, 2024) and has breached the framework agreement for debt restructuring.

Since April 2024, the group has been actively discussing and negotiating with Nanjing Meilihua for a feasible and acceptable repayment plan. Although Nanjing Meilihua has shown a strong willingness to cooperate with the group in repayment, no binding agreement has been reached by the announcement date. The group will continue to make its best efforts to negotiate the repayment of the trade debts with Nanjing Meilihua. In addition, the group has been seeking legal advice in China on possible further actions it can take, including but not limited to the enforcement of property mortgage rights under the framework agreement for debt restructuring.