[ET Net News Agency, 29 March 2017] Jilin Jiutai Rural Commercial Bank (06122) said it
is aware of the recent media coverage concerning the significant fluctuation in the share
price of China Huishan Dairy (06863) and the credit of Rmb1.83 billion granted to Huishan
Dairy by the bank as Huishan Dairy's second largest bank creditor.
The bank clarified that On 1 December 2016, it provided a credit of Rmb750 million to a
subsidiary of Huishan Dairy through the purchase of the receivables under a finance lease
from a finance lease company. The first credit has a term up to December 2021. The first
credit is charged and pledged by the underlying assets of the finance lease and the
relevant insurance policy. If and when the realizable value of the charges and pledges is
not sufficient to cover the principal amount and interest of the first credit receivable
by the bank, the subsidiary of Huishan Dairy shall have the obligation to set off the
shortfall. To-date, the bank is not aware of any significant change in the realizable
value of the charges and pledges to such an extent that is not sufficient to cover the
principal amount and interest of the first credit.
On 7 March 2017, Jiutai RCB provided a credit of Rmb600 million to a subsidiary of
Huishan Dairy for a term up to June 2017 which is guaranteed by Huishan Dairy. To-date,
the total outstanding balance of the two credits is Rmb1.35 billion and there is no
default on any interest due. The bank has not provided allowance for impairment of the
credits. (HL)