What is the creditor bank agreement?

After China Metal Capital Chain announced the suspension of production, 22 creditor banks quickly signed an internal agreement, demanding that neither party should unilaterally collect loans to reduce the balance of creditor's rights.

According to a document obtained by Caijing, the creditor bank agreement was drafted by CCB and BOC under the guidance of the regulatory authorities, and will serve as a guide for the 22 creditor banks to handle their respective claims.

The agreement reached an understanding on repayment arrangement: Changshu Kehong Technology Co., Ltd. (hereinafter referred to as Kehong) and Changshu Sing Tao Xinxing Building Materials Co., Ltd. (hereinafter referred to as Sing Tao), two major enterprises under China Metal, all used to repay the loans of creditor banks except the funds needed for enterprise reproduction. Each creditor bank obtains corresponding repayment according to its own proportion of creditor's rights.

According to the agreement, based on the creditor bank's professional judgment on the production, operation and financial situation of Kehong and Sing Tao, the creditor bank reached an understanding that "under the current circumstances, all creditor banks can only take concerted actions to ensure the security of their creditor's rights to the maximum extent".

In the "voluntary restructuring negotiation", the creditor banks jointly hired Ernst & Young Huaming Certified Public Accountants as the fund supervisor, and hired lawyers from Suzhou Wuzhou Xinyou Law Firm in Jiangsu Province and legal advisers from Changshu Branch of China Construction Bank as the same legal team.

Twenty-two creditor banks set up a "meeting of all creditor banks" as the highest power negotiation mechanism to resolve financial risks. As a unified negotiation platform, the "All Creditor Banks Meeting" decided to start the debt restructuring of Kehong and Sing Tao to get rid of the financial crisis and promote and lead the "voluntary restructuring negotiations". The "Meeting" also decided to initiate and lead the possible "judicial reorganization" procedure to save Kehong and Sing Tao, thus protecting the interests of all creditor banks.

In order to better negotiate, the parties also agreed to set up a "creditor bank meeting coordination group" as a permanent body of creditor bank meetings, and appointed a representative appointed by Suzhou Changshu Sub-branch of CCB as the team leader.

In addition, 22 creditor banks have set up seven management groups, namely, financial supervision group, operation supervision group, tax and customs appearance supervision group, labor and personnel supervision group and information file supervision group, coordination group with the government and negotiation group with strategic investors, in order to understand all aspects of information and realize the supervision of Kehong and Sing Tao.

During this period, the Creditors' Banking Committee signed an Agreement on Supervision of Funds and Accounts with Kehong and Sing Tao, requiring Kehong and Sing Tao not to transfer assets for free, not to trade at unreasonable prices, not to pay off debts that are not due in advance, not to conceal and transfer funds or assets, not to forge debts or admit untrue debts, not to export funds to the parent company in any form, not to provide credit guarantee to any third party, and not to advance money to any third party due to contract conditions.

The Agreement on Supervision of Funds and Accounts also requires that Kehong and Sing Tao should be subject to account supervision, while Kehong and Sing Tao should report the list of banks where they have opened accounts to creditor banks and agree to immediately integrate existing accounts. The principle is: Kehong and Sing Tao only keep one account in each creditor bank, and the accounts opened by Kehong and Sing Tao in non-creditor banks will be cancelled immediately.

According to the agreement, Kehong and Sing Tao shall submit a list of cleared bank accounts to the creditor bank, and indicate the nature and scope of use of each account. All cash and cash income of Kehong and Sing Tao now and in the future must be fully put into the account of the bank where the account is opened, and subject to supervision and control. Every time Kehong and Sing Tao withdraw money from their accounts, they need the written approval of their supervisors.

Banks have also reached a promise not to deduct the funds in the account to offset the bank's creditor's rights without the approval of the creditor's bank meeting; When the debtor enters bankruptcy, reorganization or liquidation, the opening bank guarantees that the funds in the debtor's account will not be deducted from the bank's debts.