On November 29th, Pangjiang Stock (600395.SH) announced that the company recently received a letter from its controlling shareholder Guizhou Energy Group Co., Ltd. (hereinafter referred to as 'Guizhou Energy Group') soliciting opinions on the proposed capital increase project of Guizhou Neng Power Fuel Development Co., Ltd. To firmly focus on its core business, strengthen, and expand the coal industry, promote the strategic adjustment of the coal industry structure of Guizhou Energy Group, and provide strategic and fundamental energy support for the industrial development of the whole province, Guizhou Energy Group intends to participate in the capital increase project of Guizhou Neng Power Fuel Development Co., Ltd. (hereinafter referred to as 'Guizhou Neng Power') disclosed on the Peking Property Exchange. As Guizhou Neng Power mainly involves coal business, in accordance with the commitment letter issued by Guizhou Energy Group on June 25, 2021, regarding avoiding competition in the same industry, the commercial opportunity of this capital increase project will be promptly provided to the company for selection. After the company's due diligence and research, considering factors such as the company's financial condition and the investment risk of the capital increase project, from the perspective of prudent operation, the company intends to decline this commercial opportunity.
Considering that Guizhou Neng Power has been in a loss-making state from 2021 to the present, with an asset-liability ratio exceeding 100%, and the financing party requires the investor to bear a large amount of debt according to the shareholding ratio or provide valid guarantees. If the company participates in the capital increase project of Guizhou Neng Power, it will face significant financial pressure, leading to an increase in the company's asset-liability ratio. In order to safeguard the interests of all shareholders and from the perspective of prudent operation, the company intends to decline this capital increase project commercial opportunity.
