Donghua Technology and Yulin Chemical have joined forces to invest in the restructuring of Inner Mongolia Cornell

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Donghua Technology and Yulin Chemistry join forces to invest in the restructuring of Inner Mongolia Cornell. Author/Source: BDO Research Institute. Date: 1/11/2023. Clicks: 18. On January 9, Donghua Technology announced that it had signed a consortium agreement with Shaanxi Coal Group Yulin Chemistry Co., Ltd. (hereinafter referred to as “Yulin Chemistry”) to form a consortium aimed at participating in the bankruptcy restructuring of Inner Mongolia Cornell Chemical Industry Co., Ltd. (hereinafter referred to as “Inner Mongolia Cornell”). The agreement stipulates that the company shall bear 60% of the funds required for this restructuring, while Yulin Chemistry will cover 40%. The consortium has signed a Letter of Intent for Investment with Inner Mongolia Cornell and the administrator of Inner Mongolia Cornell, and recently reached an Investment Agreement for Restructuring. According to the Restructuring Investment Agreement, the value of the assets underlying this investment is 1.39 billion yuan. The consortium is expected to pay 318 million yuan in cash to settle the debts of Inner Mongolia Cornell under the reorganization process, other than those related to its priority right to be compensated from company construction project payments. Among them, the company is expected to pay 191 million yuan, while Yulin Chemical is expected to pay 127 million yuan. Inner Mongolia Cornell’s 300,000 tons per year ethylene glycol production facility is set to be completed and put into operation by the end of 2023, meaning that the facility will be able to operate at full capacity and produce qualified ethylene glycol products. The company possesses advanced engineering technologies for ethylene glycol as well as technical expertise in downstream products derived from ethylene glycol, enabling it to carry out the continuation of this project in a safe and efficient manner and ensure that the production facilities meet the required standards and operate at full capacity. At the same time, the company can use this production base as a platform to carry out research and development on ethylene glycol and its downstream products, thereby establishing and strengthening its engineering and industrial advantages in the ethylene glycol industry chain. Upon the completion of the bankruptcy reorganization, the company will become the controlling shareholder of Inner Mongolia Cornell and include it in its consolidated financial statements, thereby effectively expanding the scale of the company’s operations. The Department of Chemistry at Yulin is a wholly-owned subsidiary of Shaanxi Coal and Chemical Industry Group Co., Ltd. (hereinafter referred to as “Shaanxi Coal Group”) ； Shaanxi Coal Group currently holds 20.77% of the company’s shares. Our company is in an affiliated relationship with Yulin Chemical.