Cross-border sales of Paton, but still 630 million yuan uncollected! Global Easybuy's main business has basically stagnated...

Shenzhen Global Easybuy's main business has been basically stagnant since May 2021;

Global Easy Shopping’s bankruptcy liquidation was not accepted, but Cross-border Communication claimed that it would not lose its sustainable profitability …

The former industry leader has now fallen from grace. What went wrong?

Paton's transfer payment has not yet been received

After two delays, Cross-border Communication's reply to the Shenzhen Stock Exchange's inquiry letter on the 2021 semi-annual report (hereinafter referred to as the "Reply") was finally successfully disclosed on September 29. The latest reply disclosed the progress of the repayment of the equity transfer funds of Paton, and explained in detail why the net assets of its subsidiary Shenzhen Sateng E-Commerce Co., Ltd. were -42.48 million yuan and the net profit was -1.86 million yuan, but the company's book investment in Sateng was only 300,000 yuan, and the company had a total of 4 short-term loans totaling 231 million yuan that were overdue and unpaid...

In late March this year, Cross-Border Communication issued an announcement stating that it plans to transfer 100% of Paton's equity to Xiaomi , Xiyin International , etc. for RMB 2.02 billion.

At present, 68.92% of the total amount of Paton's sales has been received , but because Paton was affected by the account ban, nearly 630 million yuan of transfer funds have not been recovered.

The unpaid amount for the transferees controlled by Paton’s management Deng Shaowei and Liu Yongcheng is RMB 337.9944 million, and the unpaid amount for other transferees is RMB 289.7324 million .

Among them, Xiaomi and Quantum Leap have paid all the equity transfer fees, while Shein still has more than 12 million transfer fees to pay, which is currently overdue . Some transferees who have not paid the equity transfer fees must pay them within 12 months after meeting the payment conditions , which means by April next year.

In its reply, K-Link disclosed that it had received the first installment of equity transfer payment, totaling 919.4136 million yuan, but the money did not go into K-Link's pocket. Instead, according to the previously signed "Paton Equity Transfer and Capital Increase Agreement", the acquirer paid it directly to the pledgee through the escrow account to repay the pledgee's debts. The specific details are as follows↓

On June 30, 2021, Cross-border Communication received the second installment of equity transfer payment of RMB 472,859,600, part of which

The repayment will be directly paid to the debtors of the company and its subsidiaries, and the remaining part will be deposited into the company's bank account. The specific details are as follows ↓

In its reply, Cross-Border Link stated that the industrial and commercial change registration for the sale of Paton's equity transaction was completed on April 22, 2021. As of that point in time, the company had completed the transfer procedures for 100% of Paton's equity and lost control of Paton, so the sale date of this transaction was set as April 22.

Global Easybuy's business stagnated, and Sateng was also affected

Global Easy Shopping has encountered considerable challenges this year. Previously, a large number of suppliers came to collect debts, and Global Easy Shopping also laid off a number of employees.

In this reply, Cross-Border Link stated that the business of its subsidiary Shenzhen Global has declined sharply, with core positions and key business employees leaving one after another. In addition, debt disputes with suppliers have further deteriorated the operating situation. Since May, the operating quality of the main business has declined and is basically stagnant.

Because of the incident at Global Easybuy, Sateng, which is under the same control as Shenzhen Global Easybuy, was also greatly affected. In its reply, Cross-border Communication mentioned that Sateng's commercial credit declined due to the bankruptcy of Shenzhen Global Easybuy, and some cooperative suppliers required increased credit guarantees, which further put pressure on Sateng's cash flow. For example, the cooperative payment company required an increase in account margin, and the payment method for the company's business promotion fees and logistics fees was changed from a certain period to advance payment.

Sateng's wholly-owned subsidiary, Safu, mainly sells its own-brand products on self-operated vertical clothing websites such as Zaful, Rosegal and Dresslily, but as of the end of the first half of 2021, Sateng's net assets were -42.48 million yuan and its net profit was -1.86 million yuan.

Sateng's net assets and net profit are both negative! In this regard, Cross-border Communication said that the development of the self-operated platform involves various expenses, which requires a large amount of capital investment. At present, due to the tight operating capital of Sateng and the decline in commercial credit due to the bankruptcy of Shenzhen Global, some cooperative suppliers require increased credit guarantees, which further puts pressure on Sateng's operating cash flow. Sateng's insufficient operating capital has led to a decrease in sales in the first half of the year.

However, as a high-quality subsidiary of Cross-Border Link, SAFU has also received strong support from its parent company. In this reply, Cross-Border Link stated that as the company's subsequent historical problems are resolved, the company will concentrate its resources on the development of SAFU's business. In the future, as operating income grows, economies of scale will be enhanced, and the company's profits are expected to improve as revenue expands.

The sale of Paton and the stagnation of Global Easybuy's business, but Cross-border Communication said that it would not lose its sustainable profitability. In its reply, Cross-border Communication said: Shanghai Youyi's main business is stable and there is no problem with its sustainable profitability; Shenzhen Global's main business is basically stagnant and has lost its sustainable profitability; Saton is the company's main operating entity for cross-border export e-commerce in the future. The company will actively raise funds to promote the rapid development of Saton's business, and it is expected that its sustainable profitability will gradually increase . The company will not lose its sustainable profitability.

It seems that SAFU will be the main source of income for KXM in the future ...

Global Easy Shopping Bankruptcy Liquidation Not Accepted

Previously, Global Easy Shopping was filed for bankruptcy, which caused a lot of controversy. There were also reports that Global Easy Shopping would go bankrupt in September. However, Cross-Border Link issued an announcement in late September, stating that the Shenzhen Court would not accept the bankruptcy liquidation of Global Easy Shopping.

Previously, Global Easy Shopping received a notice from the Shenzhen Intermediate People's Court of Guangdong Province, stating that the creditor, Industrial and Commercial Bank of China Limited, Shenzhen Nanshan Branch, applied to the Shenzhen Intermediate People's Court for bankruptcy liquidation of Shenzhen Global on the grounds that Shenzhen Global could not repay its due debts and obviously lacked the ability to repay.

In an announcement released on September 23, Cross-border Link stated that the company recently received the Civil Ruling of the Shenzhen Intermediate People's Court of Guangdong Province (2021) Yue 03 Bankruptcy Application No. 380, which was delivered by the Shenzhen Intermediate People's Court. The Shenzhen Intermediate People's Court held that the current applicant, Industrial and Commercial Bank of China Nanshan Branch, filed a bankruptcy liquidation application in this case as a creditor of the respondent Shenzhen Global Easybuy E-Commerce Co., Ltd., which was insufficient in basis and the court would not accept it for the time being. The Shenzhen Intermediate People's Court ruled as follows:

The bankruptcy liquidation application filed by the applicant Industrial and Commercial Bank of China Limited Shenzhen Nanshan Branch against the respondent Shenzhen Global Easybuy E-Commerce Co., Ltd. will not be accepted.

However, Cross-Border Link also stated in the announcement that it does not rule out the possibility that the applicant will continue to appeal the bankruptcy case filed against Shenzhen Global.

In its reply to the Shenzhen Stock Exchange's inquiry letter, Cross-Border Link mentioned that Shenzhen Global and ICBC have had long-term financing cooperation since 2016, with a maximum credit line of 150 million yuan. Shenzhen Global has been repaying the loan in installments since 2020. Due to the failure of the subsequent funds to arrive in time, ICBC filed for arbitration and bankruptcy liquidation against Shenzhen Global . As of the time before the arbitration was filed, the remaining principal was 21 million yuan.

The bankruptcy liquidation of Global Easy Shopping will not be accepted . Qichacha shows that Global Easy Shopping has been restricted from high consumption . I wonder what news will come from Global Easy Shopping next!