Huazhang Technology (01673) bid for two claims for 20 million yuan

Zhitong Finance App News, Huazhang Technology (01673) announced that on December 1, 2025, the seller Yunnan Asset Management Co., Ltd. placed an auction on the JD Asset Bidding Online Platform (https:/zcpm.jd.com) to acquire creditor rights through a public tender. The group has participated in public bidding and is the highest bidder. On December 17, 2025, the group entered into a debt transfer contract with the seller at a cost of $20 million.

The claim for this acquisition includes two parts: the outstanding principal amount of RMB 25.66 million and accrued interest/fines of the debtor company Baoshan Xinshengtai Paper (which is mainly engaged in paper manufacturing, recycling of recycled materials, etc.), and the corresponding collateral assets are approximately 97,000 square meters of land and 21,000 square meters of plant; the second is the outstanding principal amount of RMB 10 million and accrued interest/ penalties (no collateral) of the debtor company Baoshan Xinshengtai Paper (mainly engaged in the sale of construction materials, etc.). As of October 20, 2025, the total outstanding amount of the two claims was approximately RMB 74.7916 million.

The board of directors believes that since the debtor company is undergoing bankruptcy and restructuring as described in the announcement, the acquisition of its secured debt is a strategic move. The reason is that the Group, as an investor in the bankruptcy and restructuring of the debtor company, will have to pay the seller an amount similar to the cost of the debt transfer contract in accordance with the restructuring plan. Participation in public auctions and advance payments provide an opportunity for the company to have early and more effective control over the assets (i.e. certain land and ancillary buildings) that the debtor company has secured by the seller as the beneficiary to secure its debts to the seller. Furthermore, the seller is one of the five secured creditors of the debtor company and holds key voting rights at the upcoming creditors' meeting to approve the restructuring plan because it has confirmed that the value of the debt claim is about RMB 38.32 million, accounting for about 26.1 percent of the total secured debt in the bankruptcy and restructuring process. By entering into a debt transfer contract, the group will acquire from the seller all of its creditors rights in outstanding debts owed to the seller by the debtor company, thereby obtaining from the seller the key voting rights on the restructuring plan at the debtor company's secured creditors category meeting.