On July 29, Longyuan Construction (600491.SH) issued a reply to the inquiry letter on the review of its application documents for issuing shares to specific objects, and the sponsor was China Securities Co., Ltd.
Longyuan Construction raised no more than 1.849 billion yuan by issuing shares to specific objects, which will be used to supplement liquidity and repay bank loans after deducting issuance costs.
From 2021 to 2023 and from January to March 2024 (hereinafter referred to as the "reporting period"), Longyuan Construction achieved operating income of 19.548 billion yuan, 14.246 billion yuan, 9.004 billion yuan and 2.752 billion yuan respectively, and realized net profit attributable to the parent company of 667 million yuan, 380 million yuan, -1.311 billion yuan and -3.6764 million yuan respectively.
In the reply to the letter of inquiry, Longyuan Construction was required to explain the reasons and reasonableness of the pledged shares of the Lai Zhenyuan family during the reporting period, the specific use of funds, and combined with the foreign investment of the Lai Zhenyuan family, the current pledge status of the company's shares, the setting of the early warning line and the liquidation line, the trend of stock price changes, and the follow-up repayment arrangement, etc., to further analyze the risk of equity pledge, and whether the corresponding performance commitment compensation and its guarantee measures are effective and feasible.
As of June 20, 2024, the Lai Zhenyuan family held a total of 363 million shares of the company, accounting for 23.74% of the company's total share capital, and the cumulative number of pledged shares of the company was 312 million shares, accounting for 86.01% of its total shares.
Longyuan Construction said that as of the date of issuance of the reply to the audit inquiry letter, except for Lai Zhaohui, as the legal representative of Longyuan Construction, who was restricted from high consumption due to disputes between Longyuan Construction and other units and failure to fulfill payment obligations, Lai Zhenyuan's family has not had other bad or defaulted loans, there is no major litigation or arbitration that has not been settled, and it has not been included in the list of dishonest judgment defaulters, and its financial status and credit standing are good. With regard to the pledged loan that occurred before, the Lai Zhenyuan family paid the interest on time in accordance with the agreement, and actively negotiated with the creditor to extend the loan, and there was no dispute between the parties.
According to investigation, Longyuan Construction is a large-scale enterprise group with general contracting, full life cycle services in the field of infrastructure, and green building as its main business. The company was founded in 1980, formerly known as Zhejiang Xiangshan Erjian Group Co., Ltd., entered the Shanghai market in 1983, completed the restructuring in 1995, changed its name to Longyuan Construction Group Co., Ltd. in 1998, and landed on the main board of the Shanghai Stock Exchange in 2004.
As of the close of trading at noon on July 30, Longyuan Construction's share price rose 3.52% to 2.65 yuan, with a total market value of 4.054 billion yuan.