Stock Code: 000553(200553) Stock Abbreviation: ADAMA A (B) NO. 2021-28
ADAMA Ltd.
Announcement on Providing Guarantees in favor of a
Controlled Subsidiary
The Company and all members of the Company’s Board of Directors confirm that all
information disclosed herein is true, accurate and complete, with no false or misleading
statement or material omission.
I．Overview
In order to meet the daily operation and business development needs of ADAMA Huifeng
(Jiangsu) Ltd. (hereinafter referred to as “ADAMA Huifeng”), a controlled subsidiary of
ADAMA Ltd. (hereinafter referred to as the “Company”), the Company intends to provide
joint liability guarantees in favor of certain banks that are to provide banking facilities to
ADAMA Huifeng. Under such guarantees, the Company will guarantee ADAMA Huifeng’s
repayment of such debt up to a total amount up to RMB 330 million.
According to the Listing Rules of the Shenzhen Stock Exchange, the 1st meeting of the 9th
session of the Board of Directors of the Company approved the Proposal on Providing
Guarantees in favor of a Controlled Subsidiary. The decision to provide such guarantees is
within the rights of the Board of Directors. No additional approval for the aforesaid
guarantees is required from the shareholders of the Company.
II. Basic Information of the Warrantees
1. Basic Information of ADAMA Huifeng
Name of the Warrantee: ADAMA Huifeng (Jiangsu) Co., Ltd.
Established Date: June 11, 2018
Registered Address: South of Wanggangzha, Dafeng District, Yancheng City, Jiangsu
Province
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Legal Representative: Weng Botao
Registered Capital: RMB 1,000 million
Business Scope: Sales of pesticides (except hazardous chemicals), chemical products
(except pesticides and hazardous chemicals), knitted textiles, Wujinjiaodian (except electric
tricycles), daily necessities (except electric tricycles), wood, building materials, electronic
products, computers and accessories, agricultural products (unless packaged seeds) and
packaging materials; grain planting; self-operated and agency import and export business of
various commodities and technologies (except for commodities and technologies that are
restricted by the state or prohibited for import and export) (any business which legally
requires approval(s) shall be conducted after obtaining the approvals issued by relevant
authorities.) Licensed items: production of hazardous chemicals; pesticide production (any
business which legally requires approval(s) shall be conducted after obtaining the approvals
issued by relevant authorities.) General projects: research and development of biological
pesticide technology; software development; information consulting services (excluding
licensed information consulting services) (except for businesses subject to approval
according to law, business activities are carried out independently according to law within
the business license)
Relationship with the Company: The Company holds a 51% equity stake in ADAMA
Huifeng, which is a controlled subsidiary of the Company.
Credit status: After inquiring on the China enforcement information disclosure website,
ADAMA Huifeng is not a dishonest person who has the ability to perform but intentionally
avoids performing the obligations specified in the effective judgement of the court.
The most recent financial situation of the Warrantee is as follows:
Unit: ’0000 RMB
At Mar 31, 2021 At Dec 31,2020
(unaudited) (audited)
Total Assets 193,994.17 173,190.12
Total Liabilities 39,502.07 18,842.20
Bank Loans 0 0
Other Current Liabilities 25.70 676.82
Contingency 0 0
Net Assets 154,492.10 154,347.92
January to March 2021 2020
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(unaudited) (audited)
Revenue 27,826.39 2,331.78
Total Profit 192.23 -678
Net Profit 144.18 -669.95
III．Main Contents of the Guarantees
ADAMA Huifeng intends to apply for financing facilities in a total amount of up to RMB
330 million (including working capital loans, bank acceptance bills, trade finance, letters of
credit, letters of guarantee, factoring business, etc.) from certain banks, as listed below, to
meet its daily operation and business development needs.
Banks Amount (RMB, Ten thousand) Period
Jiangsu DaFeng RCB 10,000 One year
ICBC Yancheng Dafeng
15,000 One year
Sub-branch
SPD Bank Yancheng
8,000 One year
Dafeng Sub-branch
The Company intends to provide the financing banks joint liability guarantees for the
above-mentioned banking facilities.
IV. Opinion of the Board of Directors
With regard to the guarantees to be provided by the Company in favor of ADAMA Huifeng,
the Board of Directors is of the opinion that: (i) the guaranteed funds are to be used for the
daily operation and business development needs of the Company’s controlled subsidiary,
ADAMA Huifeng; (ii) although Jiangsu Huifeng Agrichemical Co., Ltd., the minority
shareholder of ADAMA Huifeng, holding 49% equity stake, (hereinafter referred to as
“Jiangsu Huifeng”), did not provide a respective guarantee in proportion to its capital
contribution, and in view of (1)ADAMA Huifeng stable operation and actual debt repayment
ability; (2) the control that the Company has over ADAMA Huifeng, its understanding of
ADAMA Huifeng’s business condition and the Company's ability to make decisions on
certain major issues of ADAMA Huifeng; (3) the guarantee fee of 0.3% per annum that the
Company will charge Jiangsu Huifeng, according to the shareholders agreement, on its
respective share covered by the Company (49%), the financial risk provided by the
guarantees is within the Company’s control. The guarantees neither significantly impact the
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regular operations of the Company, nor violate the relevant provisions of the CSRC and the
Articles of Association of the Company and do not harm the legitimate interests of the
Company and its minority shareholders.
V. Accumulated Balance of External Guarantees and Overdue Guarantees
Currently the balance of the guarantees that have been provided by the Company and/or its
subsidiaries is RMB 5,111.69 million. After providing the above guarantees, the balance of
the guarantees provided by the Company and its subsidiaries will be RMB 5,441.69 million,
accounting for approximately 25.48% of the latest audited net assets of the Company.
No guarantee is provided by the Company and/or its subsidiaries for the favor of entities not
consolidated in the Company’s financial statements.
The Company and its controlled subsidiaries do not have overdue guarantees.
VI. List of Reference Documents
1. Resolutions of the 1st Meeting of the 9th Session of the Board of Directors of the
Company.
The Announcement is hereby made.
The Board of Directors of ADAMA Ltd.
June 29, 2021
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