Busen Shares Will Be Increased By The Judicial Auction Restructuring Failure To Increase The Risk Of Operation

Recently, the Zhejiang Busen dress Limited by Share Ltd (hereinafter referred to as "Busen shares") constantly negative news, shares were judicial auction, reorganization failed to be sent to the Shenzhen Stock Exchange to ask questions, coupled with previous lawsuits trouble, Busen shares decline more and more serious.

On the evening of January 3rd, Busen shares announced that Busen shares received the auction notice of the Shanghai first intermediate people's Court (hereinafter referred to as "the first intermediate court of Shanghai") on the implementation of the notarization of creditor's rights in the case of Huabao Trust Co., Ltd. and its controlling shareholder, Chongqing an Han Hsun Technology Co., Ltd. (hereinafter referred to as "an science and technology"), and so on. The Shanghai intermediate court has issued an auction notice of equity in the "Ali auction and justice", and will publicly auction 22 million 400 thousand shares of the company's shares held by security technology (Accounting for 100% of the total shares of the company, accounting for 16% of the total number of shares of the company).

The announcement shows that the starting price of the Busen stock is 227 million 800 thousand yuan (the price is the display price, the actual starting price is multiplied by the closing price of the first 20 trading days in February 16, 2019 and the total stock number), the margin is 20 million yuan, and the increase price is 1 million yuan and multiple.

The auction time is 10 February 16, 2019, 10 -2019 February 17th (except for delay).

This can be traced back to November 15, 2017. Zhao Chunxia, the legal representative of Busen shares and ANN technology, signed the "stock rights pfer and buyback contract", "stock pledge contract" and "guarantee contract" with the legal representative of Huabao trust, Zhu Ke Ping. The 22 million 400 thousand shares of Busen stock held by science and technology were used as collateral to obtain the project trust funds of Warburg trust.

Since then, the technology has failed to fulfill the obligation to buy back according to the requirements of Warburg trust, and now Busen shares have been forced to auction by law.

In addition, if the amount of the auction is insufficient to repay, the court will seal up, seize or auction, and sell the property that the executor sees in the corresponding value, such as technology, Zhao Chun Xia and so on.

Although Busen shares said in the announcement that the company and its controlling shareholder were different subjects, the company remained independent in terms of assets, business and finance. Until now, the company's daily operation and production activities were normal, and the matter would not have a significant adverse impact on the normal production and operation of the company.

But economist Song Qinghui told the China Commercial Daily reporter that this is not a positive sign for Busen's development.

In addition, Zhao Chunxia's property may be sequestrated, seized or auctioned, which has increased the operational risk of Busen shares to a certain extent.

In 2018, Busen shares announced the termination of the takeover of Beijing Mccauley Technology Co., Ltd. (hereinafter referred to as "Mccauley"), and the 6 months of restructuring failed.

It is reported that Mccauley is one of the largest chain of communication products in China, and has entered into a strategic partnership with telecom operators and major brand mobile operators.

For the reasons for the failure, Busen shares explained that the long audit cycle and the uncertainty were not conducive to the formation of cooperation between the company and Mccauley as soon as possible.

At the Shenzhen Stock Exchange's inquiry into the failure of Busen's restructuring, the Shenzhen Stock Exchange challenged Busen's share to acquire a 10% stake in Mccauley with cash 20 million.

According to the announcement, in 2017, Mccauley's overall valuation was 120 million yuan, plus the March 2018 Beijing golden age cultural pmission, Limited by Share Ltd acquired 30% stake in when it cost 42 million yuan, corresponding to the valuation of 140 million yuan.

The Busen shares this paction on Mccauley valuation rose to 200 million yuan, the valuation is high.

Although Busen shares the view that Mccauley operates 51 Jingdong stores and Jingdong stores, the business situation is good, but it is hard to predict the actual price earnings ratio in the future.

Song Qinghui believes that the failure of Busen's stock restructuring is again a major negative impact on the company by the judicial auction. In addition, the stock price of Busen has fallen sharply since November 2018, and the risk of the company's operation is enormous.