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on september 17, st hong taiyang announced that on september 13, 2024, the company received the civil ruling no. (2024) su01 bankruptcy 20 delivered by the nanjing intermediate people's court of jiangsu province, which ruled to accept the applicant nanjing taihua chemical co., ltd.'s application for reorganization of the company.

st hong taiyang said that during the reorganization, the company will cooperate with the nanjing intermediate court and the administrator to carry out relevant reorganization work in accordance with the law, protect the rights and interests of all parties in the company to the greatest extent, and strive to complete the reorganization work as soon as possible. if the company successfully implements the reorganization and completes the reorganization plan, it will be conducive to optimizing the company's asset-liability structure.

the company's stock will be subject to a delisting risk warning on september 19, 2024, and the stock abbreviation will be changed to "*st hongyang". the daily price fluctuation limit for stock trading will be 5%.

two years ago, the company applied for reorganization

on september 14, 2022, the applicant, nanjing taihua chemical co., ltd., applied to the court for bankruptcy reorganization of nanjing red sun co., ltd. on the grounds that the latter could not repay its due debts and clearly lacked the ability to repay. the nanjing intermediate people's court decided to initiate a pre-reorganization of red sun co., ltd. and appointed jiangsu century tongren law firm as the administrator during the pre-reorganization period.

on march 26, 2024, the pre-reorganization administrator submitted a pre-reorganization work report to the court and proposed to transfer hong taiyang co., ltd. into the reorganization procedure. on april 1, the court conducted a hearing review. all parties participating in the hearing, including hong taiyang co., ltd., the company's labor union, employee representatives, creditor representatives, and shareholder representatives, expressed their support for hong taiyang co., ltd. to enter the reorganization procedure.

the court found that the applicant taihua company and hong taiyang co., ltd. had a long-term supply contract relationship. after settlement between the two parties, it was confirmed that hong taiyang co., ltd. owed taihua company 13.1506 million yuan in payment for goods. despite repeated demands from taihua company, hong taiyang co., ltd. failed to repay the matured debt.

hong taiyang co., ltd. is a joint-stock company mainly engaged in the research and development, production and sales of green pesticides and their upstream and downstream intermediates. it was listed on the shenzhen stock exchange on october 28, 1993. as of march 31, 2024, the company's total share capital is 581 million shares and the total number of shareholders is 23,875.

in recent years, the company has fallen into financial difficulties

affected by various unfavorable factors, hong taiyang co., ltd. has gradually fallen into financial difficulties in recent years. the relevant financial reports of hong taiyang co., ltd. show that the company suffered losses in 2020, 2021 and 2023. as of december 31, 2023, the company's total book assets were 6.767 billion yuan, total book liabilities were 6.914 billion yuan, and net assets were -148 million yuan.

according to the company's statistics, as of june 30, 2024, hong taiyang co., ltd. was involved in 71 lawsuits and arbitration cases due to its failure to repay debts on time, with a total amount of 4.905 billion yuan. due to its inability to repay matured debts, the relevant properties of hong taiyang co., ltd. were sealed and preserved, and it was included in the list of dishonest debtors.

during the pre-reorganization period, the administrator basically completed the main tasks such as pre-examination of claims, recruitment of investors for liquidation and capital verification, consultation, formulation and pre-voting of pre-reorganization plans, and prepared a pre-reorganization work report. after public recruitment, the intended investors were determined and a pre-reorganization plan was formulated. on december 18, 2023, the pre-reorganization administrator and hong taiyang co., ltd. organized a pre-reorganization creditors' meeting and an investor group meeting to review and vote on the pre-reorganization plan. the pre-reorganization plan was approved by a high proportion of the creditors' meeting and the investor group meeting.

the court held that hong taiyang co., ltd., the company's labor union and employee representatives, creditor representatives, shareholder representatives and other parties all expressed support for hong taiyang co., ltd. to enter the reorganization process. in view of the green transformation of the industry, production and sales, technical processes, brand influence, the company's operating conditions during the pre-reorganization period, and the progress of pre-reorganization related work, hong taiyang co., ltd. has the value and feasibility of reorganization.

st hong taiyang reminds that although the company has been ruled by the nanjing intermediate people's court to accept the reorganization, according to the relevant provisions of the enterprise bankruptcy law of the people's republic of china, the company still faces the risk of being declared bankrupt by the court due to the failure of reorganization. if the company is declared bankrupt, according to the relevant provisions of the shenzhen stock exchange's stock listing rules, the company's shares will face the risk of being delisted.