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Public company info - CECEP COSTIN New Materials Group Ltd. , 02228.HK
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CECEP COSTIN New Materials Group Ltd., 02228.HK - Company Profile
Chairman -
Share Issued (share) 2,329,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Textile & Apparels
Corporate Profile Business Summary: The Group is principally engaged in the manufacture and sale of non-woven fabrics and other types of non-woven materials prior to the suspension of trading in shares. The Group operated its business through four segments. The non-woven materials segment was engaged in the manufacture and sale of non-woven fabrics and other types of non-woven materials. The recycled chemical fibers segment was engaged in the manufacture and sale of chemical fibers produced from recycled materials. The thermal resistant filtration materials segment was engaged in the manufacture and sale of thermal resistant filtration materials. The tapioca chips trading segment was engaged in the import and export of tapioca chips. Performance for the year: On the basis of incomplete books and records and the books and records available to the Company and Directors, and other factors disclosed above, for the year ended 31 December 2020, the Group recorded no revenue but interest income of RMB43,000, which increased by 30.3% as compared to RMB33,000 for the year ended 31 December 2019. The Group’s net loss for the year ended 31 December 2020 was approximately RMB16.2 million, decreased by 29.3% as compared to the Group’s net loss of approximately RMB22.9 million for the year ended 31 December 2019. Business Review Suspension of trading in shares and the resumption status Trading in the shares on The Stock Exchange of Hong Kong Limited has been suspended with effect from 3:17 p.m. on 15 August 2016. On 22 August 2016, the Company announced the Misappropriation by Mr. Chim Wai Kong and Mr. Chim Wai Kong admitted that he had misappropriated certain funds of such PRC subsidiary but refused to disclose further details. As a result of the Misappropriation, the Board was unable to ascertain whether the Group would be able to meet its payment obligations, such as the repayment of bank loans or interest accrued when due. On 14 December 2016, the Stock Exchange placed the Company in the first delisting stage under Practice Note 17 to the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) as the Stock Exchange considered, inter alia, that the Company was unable to maintain a sufficient level of operations or assets required under Rule 13.24 to support a continued listing. As no resumption proposal was submitted before the expiry date of the first delisting stage, the Stock Exchange placed the Company into the second delisting stage commencing on 26 June 2017 and expiring on 25 December 2017. On 2 November 2017, Industrial and Commercial Bank of China (Asia) Limited served a winding up petition and a summons for the appointment of joint provisional liquidators. The summons was heard on 14 November 2017 and the Grand Court of the Cayman Islands (the “Grand Court”) made an order appointing Mr. Man Chun So, Mr. Yat Kit Jong and Mr. Simon Conway, all of PricewaterhouseCoopers, as the joint provisional liquidators of the Company (the “Provisional Liquidators”) pursuant to Section 104(1) of the Companies Law of the Cayman Islands. No resumption proposal was submitted before the expiry date of the second delisting stage. The Stock Exchange has placed the Company into the third delisting stage commencing on 24 January 2018 and expiring on 23 July 2018. According to the letter from the Stock Exchange dated 12 January 2018, the Company was required to submit a viable resumption proposal to address the following resumption conditions: (a) demonstrate sufficient operations or assets under Rule 13.24 of the Listing Rules; (b) conduct an appropriate investigation on the Misappropriation by Mr. Chim Wai Kong and disclose the findings of the investigation, assess the impact on the Company’s financial and operational positions, and take appropriate remedial actions; (c) have the winding up petitions against the Company (and its subsidiaries), where applicable, withdrawn or dismissed and the Provisional Liquidators discharged; (d) demonstrate that there is no reasonable regulatory concern about management integrity; (e) publish all outstanding financial results and address any audit qualifications; and (f) inform the market about all material information of the Company. Proposed Restructuring On 16 May 2018, the Company, Pyrrho Management Limited (“Pyrrho”) and the Provisional Liquidators (collectively the “Parties”) entered into a restructuring framework agreement (as supplemented by the supplemental agreements entered into on 26 February 2019, 15 May 2019, 15 May 2020 and 26 August 2021) in respect of, among other things, the proposed restructuring (the “Restructuring Agreement”). Pursuant to the Restructuring Agreement, the Company shall implement the proposed restructuring, which includes, among other things, (i) the capital reorganisation; (ii) the acquisition; (iii) the whitewash waiver; (iv) the open offer; and (v) the creditors schemes. On 9 July 2018, the Company submitted a resumption proposal (the “Resumption Proposal”) to the Stock Exchange in support of the resumption of trading on the Stock Exchange (the “Resumption”). The foundation of the Resumption Proposal was a restructuring agreement which includes the proposed acquisition by the Company of a target group of companies with a focus on the leasing of the residential, commercial, retail and hotel properties in prime areas located in Hong Kong and Taiwan (the “Target Group”). The acquisition constitutes a very substantial acquisition and a reverse takeover involving a new listing application of the Company under the Listing Rules. The Resumption Proposal also sets out detailed plans on satisfying the resumption conditions, including: (i) proposed acquisition of the Target Group which would satisfy Rule 13.24. Rule 13.24 requires an issuer to carry out directly or indirectly a sufficient level of operations or have tangible assets of sufficient value and/or intangible assets for which a sufficient potential value can be demonstrated to warrant the continued listing of the issuer’s securities. On Resumption, the Company will meet the requirements of Rule 13.24 as to operations (proven by the track record profits) and assets (proven by the net assets and their nature); (ii) the Company has submitted to the Stock Exchange an investigation report on 13 November 2017 and an announcement dated 24 July 2018 was published to disclose the key investigation findings about the Misappropriation. An internal control consultant will be appointed to review the internal control procedures of the Company and the Target Group, which will become the only operating subsidiaries of the Company upon Resumption; (iii) on approval from the creditors of the creditors schemes and completion of all the transactions contemplated in the Resumption Proposal, the Provisional Liquidators will apply to the courts in the Cayman Islands and Hong Kong for the winding up petitions against the Company and its subsidiaries to be discharged before resumption; and (iv) all existing Directors of the Company will resign prior to Resumption, and new Directors who are intended to meet the requirements under the Listing Rules will be appointed. On 21 September 2018, the Stock Exchange agreed to allow the Company to submit a new listing application relating to the Resumption Proposal (but not any other proposal) on or before 28 February 2019. A new listing application relating to the Resumption Proposal was submitted to the Stock Exchange on 28 February 2019. On 26 November 2019, the Company submitted the updated new listing application to the Stock Exchange. On 31 May 2021, the Listing Division of the Stock Exchange informed the Company that it intended to recommend the Listing Committee of the Stock Exchange (the “Listing Committee”) to cancel the listing of the Company under Practice Note 17 to the Listing Rules. The Company made a request to be present at the Listing Committee hearing to make an effective representation to the Listing Committee members (the “Company’s Request”). On 11 June 2021, the Listing Committee decided to reject the Company’s Request and cancel the Company’s listing (the “Delisting Decision”). On 23 June 2021, the Company made a formal request to review the Delisting Decision by the Listing (Review) Committee (“LRC”) pursuant to Chapter 2B of the Listing Rules. The hearing of the LRC was held on 28 September 2021. On 6 October 2021, the LRC decided to uphold Listing Committee’s decision to cancel the listing of the Company’s shares on the Stock Exchange (“LRC Decision”). The Company is of the view that the LRC Decision does not have reasonable grounds, having regard the circumstances, the Company has made a formal request to the Stock Exchange for a review of the LRC Decision by the Listing Appeals Committee (“LAC”) on 12 October 2021. As of the date of this Results Announcement, the LAC is still reviewing and processing the Company’s formal request. Prospects: The Board of the Company, with the assistance of their professional advisers, have submitted the Resumption Proposal and a new listing application to the Stock Exchange. The Resumption Proposal when successfully implemented will achieve, among other things, the following: • All the existing assets of the Group are transferred to a special purpose vehicle set up pursuant to the terms of the creditors schemes of arrangement, as agreed by the creditors of the Company, for realisation for the benefits of the creditors of the company; • All the liabilities of the Company are fully discharged under the creditors schemes of arrangement; • Upon the grant of the whitewash wavier by the SFC, Pyrrho or its nominee(s) will not be required to make a mandatory general offer for all the issued shares of the Company pursuant to Rule 26.1 of the Takeovers Code; • The Company will wholly own the Target Group which is with a focus on the leasing of the residential, commercial, retail and hotel properties in prime areas located in Hong Kong and Taiwan with a successful track record that meets the new listing requirements of the Stock Exchange; and • The Provisional Liquidators will be discharged; following the Stock Exchange approving resumption of trading of the shares of the Company and the new shares on the Stock Exchange. For the benefit of the shareholders and the creditors as a whole, the Company will continue, with the assistance of their professional advisers, to work with the Target Group in order to obtain the necessary approvals from the relevant regulators for the implementation of the new listing application, such that trading in the shares can be resumed for the benefits of all the shareholders of the Company, especially the minority shareholders.

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