Debt overdue exceeds 3.5 billion! Souyute’s bankruptcy reorganization application has not been ruled to accept for several months, what is the solution to the crisis?Provider Finance Association

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© Reuters. Debt overdue exceeds 3.5 billion! Souyute’s bankruptcy reorganization application has not been ruled to accept for several months, what is the solution to the crisis?

Financial Associated Press, June 21 (Reporter Lu Tingting) Involved in multiple lawsuits, bank accounts were frozen, assets were seized… Sou Yute (002503.SZ), who was caught in the quagmire of debt, announced on the evening of June 20 that the new overdue was added. The principal is 300 million yuan, and as a result, overdue debt has soared to 3.5 billion yuan.

It is worth noting that the business of Souyute is getting worse and worse, and the deduction of non-net profit has been losing money for two consecutive years, and the debt pressure is prominent. In the context of the epidemic, the company’s more than 1,000 terminal stores have been closed one after another, the product inventory has been seriously overstocked, the production line of masks and other anti-epidemic supplies has been suspended, and the supply chain business income has further weakened the company’s solvency, and there have been 3 bankruptcy reorganization applications. More than a month has not been accepted. Although the company has taken various measures to withdraw funds, it remains to be seen when the debt crisis will be lifted.

Added overdue debt of 300 million yuan

According to the announcement, during the period from May 19 to June 20, 2022, Souyute and its subsidiaries added a total of 300 million yuan in overdue principal, accounting for 89.09% of the company’s audited net assets of 337 million yuan in 2021; newly frozen 7 bank accounts. As of June 20, the overdue debt of the company and its subsidiaries totaled 3.526 billion yuan, and the total frozen fund balance was 13.7073 million yuan, accounting for 1047.21% and 4.07% of the company’s audited net assets of 337 million yuan in 2021, respectively.

Soyute pointed out in the announcement that due to overdue debt, the company may face the payment of relevant liquidated damages, late payment fees and penalty interest, which will further increase the company’s financial costs; the decline in financing capacity caused by overdue debt will also exacerbate the company’s capital shortage.

At the same time, it is reminded that at present, multiple bank accounts of the company have been frozen. If other bank accounts of the company are frozen in the future, the relevant situations in the “Shenzhen Stock Exchange Listing Rules” may be involved, and the company’s stock trading may be subject to other risk warnings.

The reporter noticed that Sou Yute has been involved in many lawsuits and arbitrations due to overdue debts, resulting in judicial freezing of some foreign investment equity, and judicial seizure of many land, real estate and vehicles, and limited assets. From November 5, 2021 to April 6, 2022, the company and its holding subsidiaries accumulatively added 15 lawsuits and arbitrations with an amount of more than 10 million yuan, and the total amount involved was 1.73 billion yuan; There were 43 litigation and arbitration matters, involving a total amount of 35.8587 million yuan. In addition, the announcement on June 17 showed that China Everbright Bank Dongguan Branch sued Souyute Group for L/C financing disputes and factoring contract disputes. The two cases required a total repayment of 64.89 million yuan of principal and its corresponding interest, penalty interest, compound interest, and attorney fees. Wait.

According to the first quarterly report of this year, as of the end of Q1, Souyute had book money of 138 million yuan, short-term borrowings of 2.778 billion yuan, and non-current liabilities due within one year of 1.039 billion yuan. The funding gap is serious, and the amount of overdue debt may increase in the future. possible.

It is worth noting that on the day when the new overdue debt was announced, Souyute revised the conversion price of “Soute Convertible Bonds” from 1.62 yuan per share to 1.60 yuan per share. The implementation date of this conversion price adjustment is: June 21, 2022. What is the purpose of this move? “It may be hoped that convertible bond holders will convert debt to equity, which will help the company reduce debt pressure and increase the stock price.” Zhang Wei, a lawyer from Shanghai Xinyi Law Firm, said in an interview with a reporter from Cailian Press.

Bankruptcy reorganization petition still pending

Looking back, Souyute suffered its first performance loss in nearly 10 years in 2020, and the loss will further expand in 2021. The annual report shows that from 2019 to 2021, the company’s non-net profit deducted was 171 million yuan, -1.621 billion yuan, and -3.293 billion yuan. The company pointed out in its annual report that the substantial loss in performance in 2020 was mainly affected by the epidemic, and the impact will continue in 2021.

Specifically, terminal stores are closed one after another, and the number of stores has dropped sharply. In 2020 and 2021, a total of 1,310 stores will be reduced. Among them, in 2021, the “trend front” brand stores will be due to poor sales, shopping mall withdrawals, lease expiration and other reasons. Multiple closures. As of the end of 2021, the company has one physical self-operated store and 520 franchised stores. In addition, due to the shortage of funds, the company mainly sold stock products last year, and no new products were launched, which in turn affected the sales performance of stores and customer payment.

In fact, the inventory backlog can also be attributed to one of the reasons for the loss of performance. According to the review of the relevant proposal by Souyute in July last year, a major price reduction and promotion was carried out on the inventory with a total book balance of 2.195 billion yuan, including raw material cloth and clothing inventory.

Losses from discounted sales and inventory write-downs are likely to increase this year. Last year, the company changed its production mode to directly purchase finished products, and sold the cloth inventory materials originally prepared for its own clothing production. high, and the net realizable value of inventories decreases. This year’s “618”, the company also participated in multi-platform mid-year promotional activities.

In terms of customer collection, the data shows that the company’s accounts receivable balance at the end of 2021 was 1.761 billion yuan, of which the top five arrears had a total arrears of 986 million yuan and bad debt reserves of 247 million yuan. In replying to the Shenzhen Stock Exchange’s 2021 annual report inquiry, Souyute mentioned that the debtor had business stagnation and capital turnover difficulties, and there was uncertainty in its ability to perform the contract. As of the end of the first quarter of this year, the balance of accounts receivable was 1.762 billion yuan, and the company may face the risk of a large amount of bad debt provision for accounts receivable.

In addition, in 2020, the company invested 95 million yuan in masks and meltblown cloth production lines and other equipment. Because the related medical subsidiaries gradually stopped production in September last year, most of the machinery and equipment were idle. The company’s fashion electronics business revenue fell by more than 50% year-on-year last year; the supply chain business is also at risk of further decline.

According to the data, Souyute’s creditors applied to the court on February 25 this year for bankruptcy and reorganization of the company on the grounds that the company could not repay the debts due and obviously lacked the ability to repay.

Zhang Wei said, “If the reorganization work continues without progress, the debt pressure faced by the listed company will be considerable, and the creditors may take measures such as property preservation to freeze the company’s assets, thereby affecting the normal operation of the company. If the situation worsens, it may also be possible in the later stage. There is a risk of delisting.”

Regarding the latest debt response measures and the progress of the reorganization, the reporter called and wrote to Souyute many times, but no reply was received as of press time.

(Editor: Cao Jingchen)

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