The Bank Of China Has Been Sued To Repay Tens Of Millions Of Bank Loans, 5464 Machinery And Equipment And 280 Million Shares Or Discount.

The Bank of China Ningxia Limited by Share Ltd (hereinafter referred to as "*ST velvet") announced in the evening of February 21st that the company received the civil judgment of Yinchuan intermediate people's Court of the Ningxia Hui Autonomous Region (hereinafter referred to as "Yinchuan intermediate court") today, and requested the company to repay the principal of the plaintiff's Bank of China, Limited by Share Ltd and the Ningxia Hui Autonomous Region branch (hereinafter referred to as "Bank of China Ningxia branch") within ten days after the judgment came into effect, to repay the principal amount of 26 million yuan, interest 968 thousand and 300 yuan (interest to October 18, 2018), and October 19, 2018 to the date when the judgment determines the payment date.

If *ST Zhong Rong fails to fulfill the obligation of repayment, the Ningxia branch of Bank of China has the right to pay priority to the 5464 machines and equipment sold by the defendant, the Limited by Share Ltd of the Bank of China (cashmere), Limited by Share Ltd, and the price paid by auction or sale. In addition, the Bank of China Ningxia branch also has the right to share 204 million 420 thousand and 900 shares of all the Ningxia Zhong Yin Duncan Garments Co., Ltd., the 20 million stake of Ningxia Zhong Yin fine textile import and Export Co., Ltd., the 18 million 750 thousand shares of Beijing Zhuwen fashion textile Limited by Share Ltd, and 50 million yuan equity of Jiangyin Zhong Rong Textile Co., Ltd. in the name of *ST Zhong Rong, and the price of the auction or sale will be paid priority within the 390 million yuan ceiling.

Public information shows that *ST cashmere is mainly engaged in the production and sale of cashmere, wool, linen and its blended textiles.

The main products are natural and plant fibers, which are mainly raw materials, including yarn, fabrics, garments, garments and other knitted and woven products, including all kinds of worsted and woolen textiles.

The company has advanced equipment in the industry, has the advantage of scale, raw material processing technology is strong, combing, striping technology, dyeing and spinning, weaving technology are in the forefront of the industry.

Since 2018, the price of raw materials has risen faster than the previous period, and the gross margin of sales has declined compared with the same period last year, which has affected the company's performance. From the beginning of the year, the *ST cashmere fund continued to be tight, which was affected by the working capital of the company, and the procurement of raw materials was not timely. The company's orders fell more than that of the same period last year, resulting in a faster increase in unit production costs and a decrease in gross profit margin compared with the same period last year, affecting the company's performance.

According to *ST's January 31st announcement of 2018 results, it is expected that the company will lose 1 billion 700 million -25 billion in 2018, compared with 47 million 962 thousand and 200 yuan in the same period last year, down 5312.44% to 3644.46% over the same period last year.

Reporters also learned that the *ST cashmere made a partial payment to cashmere suppliers at the end of 2017. Due to price increases and other factors, the company failed to receive raw materials as scheduled. In 2018, the price of raw materials has been on the rise. Compared with the beginning of the year, the price of the company has been up to 60%. The purchasing cost of the company has increased, and the execution of orders has been seriously affected. It is difficult to carry out business normally. On the one hand, there is lack of raw materials and lack of circulating funds, and on the other hand, the business environment is bad. In the two quarter of 2018, banks and other creditors continue to sue and face customs punishment.

In such a situation of internal worries and external difficulties, it is a great challenge for the company to change its present situation, get rid of difficulties and maintain its normal operation in accordance with its previous production and operation mode.

Due to the lack of liquidity, such as procurement of raw materials, payment of social security, maintenance of large customers, safe production, sewage disposal, loss of key staff, equipment maintenance and tariff payment, the company is struggling to cope with these debt problems and is difficult to operate normally.

*ST Zhong Rong said frankly, influenced by many lawsuits, the financing environment changed, the company's funds were more intense, and the procurement of raw materials was limited, which had a huge impact on the production and operation in the later stage.

The first textile network reporter also learned that due to the further deterioration of the debt crisis of the joint-stock company in 2018, it resulted in no funds to purchase raw materials, resulting in a sharp decline in its production capacity.

In view of this shortage of liquidity, in 2018, the company's production and business strategy changed from the original mode of large production and large trade to the form of production trade + entrusted processing, so as to maintain the operation of the company.

Although the total output in 2017 did not reach the design capacity, it was mainly affected by the previous year's tax and lost the large customers such as UNIQLO. However, there was no large area shutdown.

In 2018, because of the shortage of funds, the company failed to receive the relevant raw materials of large quantities of raw materials purchased in advance at the end of 2017, and cancelled some orders, resulting in a decline in sales revenue in 2018 and corresponding production decline. At the same time, due to the gradual start of 2018 and major litigation, cashmere raw materials and yarns, which are used as mobile pledge, need to store two times value of goods to go out of the warehouse, which also affects the liquidity of the company, resulting in some orders not being delivered in time, affecting sales revenue, resulting in the company's workshop being discontinued at different levels.