Securities Times Network (www.stcn.com) March 07, NORD shares (600110) announced on the evening of March 7, the company and Shenzhen Zhongfeng Global Electronics Co., Ltd. signed on March 4, 2016 on the sale of assets related matters Equity transfer agreement. According to the agreement, the company sold 75% of the shares of Zhengzhou Cable Co., Ltd. (hereinafter referred to as “Zhengzhou Cable”) to Shenzhen Zhongfeng Global Electronics Co., Ltd. for 52.2 million yuan.
According to the announcement, Zhengzhou Cable Co., Ltd. was established on September 5, 2007. NORD shares hold 75%, Zhengzhou Investment Holdings Co., Ltd. holds 24.7%, Zhengzhou Cable Group Co., Ltd. holds 0.3%, and registered capital is 300 million yuan. The paid-up capital is 300 million yuan. The operating scope of Zhengzhou Cable is mainly for the manufacture and sale of wire and cable and accessories, wire and cable raw materials, electrical special equipment and spare parts, wire and cable technology and equipment, wire and cable engineering technical consultation, and import and export of goods and technology.
Nord’s shares said that in recent years, due to the market and many other reasons, Zhengzhou Cable has suffered huge losses in its successive years, and its historical burden is heavy. The management expenses have increased year by year, which has greatly affected the company’s profit realization. At present, Zhengzhou Cable has been in a state of suspension of production and shutdown, and it has been unable to meet the needs of the company’s development strategy.
As of September 30, 2015, Zhengzhou cable assets totaled 672 million yuan and total liabilities were 512 million yuan. From January to September 2015, Zhengzhou Cable realized an operating income of 245 million yuan and a net profit of -31.073 million yuan.
As of the signing date of the agreement, Zhengzhou Cable’s external liabilities were approximately 317 million yuan, of which the arrears to Nod’s shares were approximately 278 million yuan. According to the agreement, the transferee Shenzhen Zhongfeng Global Electronics Co., Ltd. needs to repay 200 million yuan to Zhengzhou Cable on May 30, 2016, and the balance will be repaid before June 30. The transferee received a consideration of the actual payment of 75% equity of Zhengzhou Cable, which was approximately 369.2 million yuan.
Nord Group said that the reason for the sale of assets is to further focus on the development of the main business, divest non-primary assets and long-term loss business segments, adjust the company’s equity investment structure and asset-liability structure, clarify the company’s operating management system, reduce management costs . By divesting equity to digest the company’s original debt burden, it will reduce the historical burden and promote the long-term development of listed companies.
At the same time, the value of this sale is higher than the book value of the company as of the end of February 2016, so the transaction is expected to generate about 10-20 million yuan of investment income for the listed company in 2016. The sale, which can obtain part of the cash flow to improve the company’s asset-liability structure, will help the company to further focus on the development of the main business.
(Securities Times News Center)