Huishan Dairy, which just announced 4 days ago that its sales in April fell by 40% year-on-year and is being sued for 421.8 million yuan, has received bad news - the company's cash of more than 2.4 billion yuan has "disappeared".
On June 5, Huishan Dairy (06863.HK) announced on the Hong Kong Stock Exchange that the company’s cash and cash equivalents were approximately 2.9 billion yuan, but the cash confirmed by the bank was only 467 million yuan, of which The difference of 2.433 billion yuan needs further clarification. At the same time, the company's net assets have become negative.
Huishan Dairy announced that as of March 31, 2017, the group’s estimated total assets (excluding provisions) were approximately RMB 26.22 billion; during the same period, the group’s estimated total debt was approximately RMB 26.73 billion yuan. In other words, Huishan's total assets minus total liabilities are already negative 510 million yuan.
Inquiry into Huishan Dairy's 2016 fiscal year performance report found that as of September 30, 2016, Huishan Dairy's total assets were approximately 34.1 billion yuan, and its net assets were approximately 12.9 billion yuan. In other words, in the past nine months, Huishan Dairy's assets have lost approximately 7.9 billion yuan, and its net assets have also turned negative from nearly 13 billion yuan.
The announcement on June 5 showed that Huishan Dairy’s assets were 26.22 billion yuan, mainly including cash and cash equivalents of approximately 467 million yuan, properties, plants and equipment of approximately 7.99 billion yuan, and biological assets of approximately 7.99 billion yuan. RMB 6.81 billion and rental prepayments of approximately RMB 3.75 billion, inventories of approximately RMB 1.40 billion and other assets of approximately RMB 5.8 billion.
Comparing last year’s financial report data, it can be found that cash and cash equivalents have shrunk the most, from about 8.2 billion yuan nine months ago to 467 million yuan now, an evaporation of more than 7.6 billion yuan.
In addition, what is strange is that according to the latest announcement, Huishan believes that as of March 31, 2017, the company’s cash and cash equivalents on the books amounted to approximately RMB 2.9 billion, but the bank’s Only RMB 467 million. In other words, more than 2.4 billion yuan "missed". In this regard, Huishan said: "This major difference needs further clarification."
Huishan Dairy also stated that it will continue to work with its advisors, creditors and other stakeholders to formulate and negotiate possible debt obligations Reorganization plan. Trading in the company's shares will remain suspended.
On the night of June 1, Huishan Dairy announced that its sales in April fell by 4.13 to 257 million yuan year-on-year, and the group had 16 new legal lawsuits filed in China, with the total amount of claims involved in the lawsuits Approximately RMB 421.8 million.
Data released by Huishan Dairy show that the group’s sales for the fiscal year ended March 31, 2017 were approximately RMB 5.504 billion, a year-on-year increase of approximately 21.6%, mainly due to the growth in sales of liquid milk products.
The company’s sales in April 2017 were approximately RMB 257 million, a decrease of approximately 41.3% compared with the same month in 2016. Huishan Dairy believes that this is "in part due to the fact that after the company's shares were suspended from trading at the end of March 2017, some major suppliers or creditors tightened their credit policies, which adversely affected the group's cash flow." However, under such circumstances, the Group continued to operate its business in the ordinary course of business.
The announcement shows that Yang Kai, chairman of Huishan Dairy, has appointed Shenzhen Fuhai Yintao Asset Management Co., Ltd. as a debt restructuring consultant to be responsible for the possible debt restructuring involving the group and the entire company owned by Yang Kai. Advising on restructuring arrangements and assisting in formulating and negotiating possible restructurings with creditors.