Loss Superimposed Debt Crisis * ST Hengkang Delisting "Crisis" Not Solved

*St Hengkang is applying for bankruptcy reorganization and has made new progress.

On October 27, * ST Hengkang issued a notice on the receipt of the civil ruling. Huabao trust has filed a lawsuit against Jingfu Huacai (Taizhou) Asset Management Center (limited partnership) to Jiaojiang District Court of Taizhou City, Zhejiang Province (hereinafter referred to as "jingfuhuacai") compulsory liquidation application, the case has been ruled by the court; nearly three months ago, on July 28, the court also accepted Huabao trust's application for compulsory liquidation of beijingfuhuayue (Taizhou) Asset Management Center (limited partnership) (hereinafter referred to as "jingfuhuayue"), and the application was soon ruled by the court.

Deep debt, coupled with a series of court decisions, or accelerating the delisting risk of * ST Hengkang in continuous losses. On October 15, * ST Hengkang released a performance announcement, saying that it was expected that the first three quarters' performance would still be a loss. According to the relevant provisions of Shenzhen Stock Exchange, if the company's net profit after audit in 2020 is still negative, the company will be warned of delisting risk, and the audited net profit in the first accounting year will continue to be negative, and the company's shares will have the risk of suspension of listing.

At present, creditors have applied to Longnan intermediate people's court for reorganization of the company. According to market rumors, Haiwang biological will intervene in * ST Hengkang as an investor in * ST Hengkang's bankruptcy reorganization industry. On October 27, the relevant person in charge of the general secretary office of Haiwang biology responded to the reporter of the 21st century economic report, saying that he had not heard of the above news.

At the same time, on October 27, the 21st century economic reporter also called the Secretary Office of * ST Hengkang. However, as of the time of publication, no one answered the phone.

In the last two months of 2020, who can complete the "shell rescue" of * ST Hengkang?

Delisting "crisis"

At the end of 2016 and the beginning of 2017, Hengkang medical group, which is in the peak period of expansion, cooperated with Jingfu assets, whose trustee is Agricultural Bank of China, successively established two M & a funds of Beijing Fuhua Yueyue and jingfuhua.

At present, the three-year duration has expired, and both funds are in a loss state. Minsheng trust and Huabao trust naturally require Hengkang medical to provide the bottom line according to the terms. However, Hengkang medical has been deeply in debt crisis at this time. Faced with Hengkang medical which is unable to perform the contract, que Wenbin, the actual controller of Hengkang medical, and Sichuan Hengkang Development Co., Ltd. controlled by Hengkang Development Co., Ltd., are lack of the ability to underwrite and buy back Credit, the two trust companies began to file a lawsuit to many courts.

On July 10, * ST Hengkang announced that on July 9, 2020, it received the notice of response, civil complaint and other legal documents served by Beijing No.2 Middle court, and Minsheng trust sued it to Beijing No.2 Middle court for partnership agreement dispute, and it was filed for acceptance on June 4, 2020. *St Hengkang said that in this case, the company will face the payment of the partnership interest purchase price, the principal and investment income of about 115.8415 million yuan, as well as related liquidated damages.

On September 29, * ST Hengkang announced that it had received the hearing of Beijing No.2 Middle people's court and made a judgment request, and Hengkang Medical Group paid Huabao trust 432452337.80 yuan of partnership interest acquisition and liquidated damages (based on 432452337.80 yuan as the base number, from May 12, 2020 to the actual payment date, calculated according to the standard of 3 ‰ per day).

On September 27, the Jiaojiang District People's Court of Jiaojiang District accepted the application for compulsory liquidation of the Fujiang District People's court, which also said that the applicant's application for compulsory liquidation was filed by the Jiaojiang District People's court.

*St Hengkang said that according to the partnership agreement, the liquidation of jingfuhuacai may have a series of impacts or risks on the company. For example, the operating loss of jingfuhuacai is made up by the property of the limited partnership. When the limited partnership suffers losses, the company ranks first as the inferior limited partner (Hengkang medical group) and bears the losses according to the amount of paid in capital contribution.

Deep debt, coupled with a series of court decisions, or accelerating the delisting risk of * ST Hengkang in continuous losses. On October 15, * ST Hengkang released a performance announcement saying that it is expected that the first three quarters will still be in deficit. If the net profit after audit in 2020 is still negative, there will be the situation that the audited net profit in the first accounting year will continue to be negative after the delisting risk warning is implemented, and the company's shares will have the risk of suspension of listing.

If the company withdraws from the market two months later, the two M & a funds of Jing Fu Hua Cai and Jing Fu Hua Yue can be paid off through the hospital equity auction, but how the interests of subsequent stock investors and creditors can be protected is not known.

Who will "redeem"?

On the edge of delisting, * ST Hengkang is waiting for "Redemption".

*Que Wenbin, the actual controller of St Hengkang, has been working hard, but the effect is not as good as expected. Que Wenbin had planned to transfer his shares and give up his voting rights twice.

For example, on the evening of November 21, 2018, Hengkang medical released the equity change report, saying that Zhang Yufu acquired Hengkang medical shares by debt, and transferred 558.63 million shares of Hengkang medical held by que Wenbin, but it failed in the end; in 2019 and 2020, the voting rights were transferred to song Lihua, deputy director of Hengkang medical, as well as the China enterprise Huilian and Minmetals Jintong, which had not achieved the expected effect Fruit. As of March 2018, que Wenbin held 100% pledge of Hengkang medical shares.

*St Hengkang said that at present, the applicant has submitted a reorganization application to the court, but whether the application can be accepted by the court and whether the company will enter the reorganization procedure is still of great uncertainty.

However, at the time when * ST Hengkang's bankruptcy reorganization was not finalized, news came from the industry that Haiwang biological was involved as an investor in the bankruptcy restructuring industry.

A senior lawyer in the industry told the 21st century economic report that in the process of enterprise bankruptcy and reorganization, interested investors can contact and discuss investment intention, because bankruptcy reorganization is open to all investors.

Guo Haizhen, partner of Guantao law firm, pointed out to the reporter of 21st century economic report that the investors of bankruptcy reorganization industry must go through certain legal procedures before they can be finally confirmed. Usually, creditors and debtors can apply for bankruptcy reorganization. After applying to the court, the court needs to accept it for a period of time, during which it will see whether the conditions specified in the bankruptcy reorganization law are met and how to meet them If so, it will quickly adjudicate an administrator, the debtor will restructure, and make an announcement. In the announcement, the designated administrator will be announced at the same time.

"After obtaining the court's ruling, the debtor submits a draft reorganization plan to the court for supervision by the administrator; another way is for the administrator to draft the reorganization plan, which is usually submitted to the court and the creditors' meeting within six months after the court's ruling. At this stage, once the decision is made to restructure, industry investors will enter. " Guo Haizhen explained.

For the above-mentioned industrial investors and the market rumors that Hengkang medical group has intervened to help it expand the drug supply chain, Haiwang biological responded that it did not know.

It is worth noting that the pharmaceutical supply chain is facing significant changes due to a series of policies, such as national procurement with volume and one vote system. In the past few years, many pharmaceutical companies that aggressively acquired hospitals, such as Kangmei pharmaceutical, Renfu pharmaceutical and Guizhou Yibai, sold the hospitals quickly because of the unsatisfactory profit integration of the supply chain after purchasing the hospitals at a high price.

In fact, this is not the first time that Neptune has been introduced into the medical field. On July 31, 2019, it was circulated on the Internet that Lei Zhengxiu, President of Hubei Jianghan Oilfield General Hospital, issued a letter to the staff of the hospital, saying that he firmly resisted the acquisition of Haiwang biology due to its opaque operation and poor financial condition of the purchaser.

At that time, the 21st century economic report called the general secretary office of Haiwang biology, and the relevant person in charge said that he did not know about the acquisition of Jianghan Oilfield General Hospital by Haiwang biological, and did not comment on whether to purchase the third class a hospital based on the needs of strategic transformation. Subsequently, Haiwang biological announced that Xiaogan Haiwang only participated in the selection of strategic investors of Hubei Jianghan Oilfield General Hospital, and had not carried out due diligence. At present, there is no substantive plan to purchase the hospital.

According to market analysis, if Haiwang wants to participate in the hospital industry merger and acquisition again, it is not known whether it will obtain the support of hospital staff and whether it will perform the Jianghan Oilfield General Hospital version again.