Chongqing Sansheng Industrial (ST 002742.SZ) announced that its overseas subsidiary, Sansheng Pharmaceutical Co., Ltd., signed a mortgage guarantee contract with NIB Bank of Ethiopia (referred to as "NIB Bank") on June 26, 2019, using its factory and machinery equipment as collateral to provide a guarantee for SSC Construction P.L.C (referred to as "SSC") to borrow 400 million Birr (approximately RMB 51.83 million) from NIB Bank. This matter constituted a violation of external guarantee provided by the company without the approval of the board of directors, the supervisory board, and the shareholders' meeting. As of May 30, 2024, SSC still has an outstanding loan principal and interest of 109,141,065.05 Birr (approximately RMB 13.78 million) that has not been repaid. On June 5, 2024 local time, Sansheng Pharmaceutical received a letter from NIB Bank stating that SSC had repaid the loan principal and interest of 60,031,035.85 Birr (approximately RMB 75.36 million) to NIB Bank in advance on June 5, 2024; as of that day, the balance of SSC's unpaid loan principal and interest was 49,417,632.62 Birr (approximately RMB 6,204,231.26).
After the company's self-inspection, the company and its subsidiary companies did not provide funds to SSC or its affiliates. SSC confirmed that the source of funds for the repayment of bank loans this time came from its own raised funds and stated that it would accelerate the repayment obligation of outstanding loans and will release the mortgage guarantee provided by Sansheng Pharmaceutical as soon as possible. The company and the board of directors will continue to urge SSC to fulfill its repayment obligations as soon as possible and eliminate the impact of the above-mentioned violations.