Finance Association, Feb. 6 (Editor Yang Bin) On the evening of February 5, Helitai (002217.SZ), an important subsidiary of Fujian Electronic Information (Group) Co., Ltd. (“Fujian Electronic Information Group”), announced that it had been applied for restructuring and pre-restructuring by creditors. Earlier, Helitai's performance forecast with losses exceeding 10 billion dollars attracted market attention. Meanwhile, Fujian Electronics Information Group has been added to the credit rating watch list by rating companies due to uncertain matters relating to Helitai's share transfers.

Helitai announced that the company received a “Notice Letter” from the applicant, Fujian Huamin Financial Leasing Co., Ltd. (“Fujian Huamin”). Fujian Huamin has submitted an application to the Fuzhou Intermediate Court to restructure and pre-restructure the company on the grounds that the company is unable to pay off its maturing debts and that its assets are insufficient to settle all debts, but that it still has restructuring value and has the ability to conduct independent negotiations with major creditors.

Fujian Huamin is the lessor of Helitai's financial leasing business. It has signed a number of “financial sales and leaseback contracts” with the company and holding subsidiaries, and the amounts under the contracts have not yet been settled. As of the date the “Notice Letter” was issued, the company and its holding subsidiaries had not paid the total rent balance of 137 million yuan in Huamin, Fujian, of which 79.0218 million yuan was overdue.

Currently, Helitai has not received documents from the Fuzhou Intermediate Court to initiate pre-restructuring or accept the restructuring application. The company stated that it will actively communicate with the courts, regulators, relevant government departments, creditors and other relevant parties. Relevant matters are being closely promoted, and the company will continue to actively cooperate with the court in all aspects of its work.

On January 31, Helitein's performance forecast with losses exceeding 10 billion dollars attracted market attention. According to the performance forecast, Helitai expects to lose 90 to 12 billion yuan in 2023, a further increase over the previous year's loss of 3.466 billion yuan. At the same time, the company also expects the equity belonging to the parent company's owners to be -6.51 billion yuan to 3.51 billion yuan at the end of 2023.

Since net assets are expected to be negative, Helitai indicated that a delisting risk warning may be implemented. Since January 31, Helitai's stock price has been falling “by one word” for five consecutive days.

In explaining the reason for the company's huge pre-loss in performance, Helitai mentioned that due to the uncertain transfer of the company's actual control rights, the amount of financing and credit was limited, and debts were overdue. However, the uncertain transfer of Helitai's shares has also made Fujian Electronic Information Group, its largest shareholder, attract a lot of attention in the bond market.

On June 5, 2023, Fujian Electronic Information Group, the controlling shareholder of Helitai, signed a share transfer agreement with Huishe Technology to transfer 503 million Helitai shares (16.15%) to Shenzhen Huishe Technology Partnership (limited partnership) (“Huishe Technology”), with a total transfer price of 3,065 billion yuan. However, Huishe Technology was unable to accept the payment on time.

On November 12, Fujian Electronics Information Group announced that in view of Huishe Technology's failure to fulfill the obligations agreed in the signed share transfer agreement, constituting a breach of contract, Fujian Electronics Information Group decided to cancel and terminate the “Share Transfer Agreement” and other rights and obligations relating to the share transfer.

China Chengxin International's latest rating for Fujian Electronic Information Group in November 2023 was AAA, but it was included in the credit rating watch list. According to the rating opinion, the negative impact on Helitai due to the fact that the equity transfer process falls short of expectations is expected to be difficult to eliminate, and this matter has also caused Fujian Electronic Information Group to face certain compensation risks and challenges in terms of the financing environment.

The operating performance of the holding subsidiary had a significant impact on the consolidated net profit of Fujian Electronics Information Group. From January to September 2023, the company's consolidated net profit was 5.881 billion yuan, and the amount of losses accounted for 19.68% of the net assets at the end of the previous year.

In terms of assets and liabilities, as of the end of the third quarter of 2023, Fujian Electronic Information Group had total assets of 97.964 billion yuan, total liabilities of 69.123 billion yuan, and a balance ratio of 70.56%. Of this, current liabilities amounted to $45.338 billion, mainly short-term loans of 18.129 billion yuan and non-current liabilities due within one year of 10.556 billion yuan. The company's account capital was 13.621 billion yuan, and the cash to maturity ratio was 0.32 and -0.02, respectively.

Currently, Fujian Electronics Information Group has no bonds in stock. Since issuing the first issue of the Science and Technology Innovation Note “22 Fujian Electronics MTN001” in June 2022 (which expires in December 2023), it has not issued any more bonds for more than a year and a half.