Grand Ocean Retail : An update on outstanding receivables due from Damahua

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Provided by: Grand Ocean Retail Group Limited
SEQ_NO	3	Date of announcement	2022/03/18	Time of announcement	14:13:25
Subject	An update on outstanding receivables due from Damahua
Date of events	2022/03/18	To which item it meets	paragraph 51
Statement	1.Date of occurrence of the event:2022/03/18 2.Company name:Grand Ocean Retail Group Limited 3.Relationship to the Company (please enter "head office" or "subsidiaries"):head office 4.Reciprocal shareholding ratios:Not applicable 5.Cause of occurrence: An update on outstanding receivables in the amount of NT 358,992 thousand (CNY 81,000thousand) due from Damahua 6.Countermeasures: 1).For receivables of CNY 324 million from Quanzhou Fullshare Group,it has refunded 10% of total investment amount,i.e., CNY 32.4 million,in compliance with our contract before Apr.28,2017,and refunded 40% of total investment amount,i.e.,CNY 129.6 million before Nov.13,2017.The remaining receivables are 50% of the total investment amount,i.e., CNY 162 million. Shenzhen Damahua Investment Co., Ltd. agreed to transfer the creditor's rights of CNY 162 million,The first transfer payment CNY 30 million was paid on February 9, 2021, and CNY 25.5 million was paid on December 30, 2021, and CNY 25.5 million was paid on March 11, 2022, and the remaining CNY 8,100 thousand must be paid before June 30, 2022. 2)For receivables from Quanzhou Fullshare Group,after negotiation with Damahua,it is willing to continue to participate in the development because Damahua evaluated that the location and conditions of the project still have deep commercial development value. And it agreed to transfer the creditor's rights under the original agreement,due to local policies and the COVID-19 that have had a greater impact on the original restructuring project plan of Damahua,Therefore,to adjust and increase the payment of the first creditor's right amount in exchange for the change of repayment conditions,the two parties agreed to sign the additional "Debt Transfer Confirmation Agreement". 3)The company's creditor's rights protection of the "Debt Transfer Confirmation Agreement" supplemented is briefly explained as follows: (1)Damahua confirms that,as the conditions for the transfer of the creditor's rights agreed in the original agreement have been established,Damahua has agreed to transfer the company's creditor's rights and all accompanying rights at a consideration of CNY 162 million. (2)Affected by the force majeure factors of the COVID-19 and the local real estate policy in Quanzhou,Damahua applied for an increase in the payment of the first debt transfer amount as a condition in exchange for preferential credit payment conditions.The payment method was changed to: 1)Before February 9, 2021,pay the first transfer payment CNY 30 million. 2)Before December 31, 2021,pay another CNY 51 million of the transfer payment which is 50% of the total transfer payment. 3)Before June 30, 2022,all transfer payment is paid off,accumulated to CNY 162 million. 4)On the premise of obtaining the written consent of the company in advance,Damahua can use the form of "debt with housing" to repay the commercial housing that has been completed and meet the sales conditions of the Quanzhou Fullshare project to the company as a payment for the transfer of debt by Damahua supplementary method.The discount rate of the real estate creditor's rights shall be negotiated separately by both parties,and the discount rate shall be approved in writing by the company in advance. 4)The supplementary "Debt Transfer Confirmation Agreement" has been discussed and approved by the company's interim audit committee and board of directors on February 5, 2021,the agreement has been signed and the company has confirmed the receipt of the first period of creditor's rights transfer of CNY 30 million, and received CNY 25.5 million on December 30, which is half of the original contract, because business of Damahua needs to maintain a large cash position at the end of the year, the remaining CNY 25.5 million will be postponed to March 15, 2022, and has been approved by the company's audit committee and board of directors on January 21, 2022. The company received CNY 25.5 million on March 11, 2022, Damahua's next payment date will be June 30,2022 , CNY 8,100 thousand must be paid. Our company will pay attention to the repayment of Damahua and report in the latest report of the board of directors situation after receive the payment in installments. 5)According to Article 14-4 of the Securities and Exchange Act and Article 218, Paragraph 1 and Article 224 of the Company Act,independent directors must supervise and remind the management when they discover that the company is in danger of major damage.The independent directors have indeed supervised the progress of the collection of the receivables that have not yet been collected by Damahua,and reminded the management of subsequent measures. 7.Any other matters that need to be specified:None