Ann: Appointment of receivers and managers, page-334

From Burwill Interim Results - https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0918/ltn20190918307.pdf

The loss of the Group attributable to the shareholders for the first half was approximately HK$182 million, including certain exceptional losses, namely an impairment loss on the security investment in a Singapore-listed lithium company of approximately HK55 million, net impairment losses on financial assets of approximately HK$30 million and share option expenses of approximately HK$21 million.

Lithium related business

Our operation in this area was impacted directly in a negative way by the change in the industry value chain from the upstream to the downstream. Although the Bald Hill Mine in western Australia produced 77,008 tons of lithium spodumene and shipped 58,000 tons to Jiangxi Baojiang Lithium Industrial Limited (“Baojiang”), it has suffered from high production costs that led to lower-than-expected profits and cash flow, which eventually triggered a debt default of Alita, its controlling company. Meanwhile, despite Baojiang has successfully revised the pricing of the off-take contract from the fixed-scheme to the floating-scheme, it still operated at losses during first half of 2019, due to the low price of industry-grade carbonate while the higher price, profitable battery-grade product was still not in mass production. In addition, the Group’s prepayment for the purchase of spodumene was tied up for a long time, which also negatively impacted the operating cash flow. These factors have contributed to the situation that the Group has insufficient cash to fulfill some of its outstanding debt obligations.

WINDING UP PETITION

Strong Petrochemical Limited (the “Petitioner”) has filed a petition (the “Petition”) to the High Court of Hong Kong Special Administrative Region (the “High Court”) for the winding up of the Company on 4 September 2019 and the Petition will be heard before the High Court on 30 October 2019 at 9:30 a.m.. The Company received the Petition on 4 September 2019 in the matter of the Companies (Winding Up and Miscellaneous Provision) Ordinance (Chapter 32 of the laws of Hong Kong) (the “Companies (WUMP) Ordinance”) that the Company may be wound up by the High Court under the provisions of the Companies (WUMP) Ordinance on the ground that the Company may be insolvent and unable to pay its debts. The Petition was filed against the Company for failure to settle its indebtedness to the Petitioner in the sum of HK$21,050,000 (the “Indebtedness”) as at 30 August 2019. The Indebtedness is in relation a loan agreement dated 17 January 2019 made between, among others, the Petitioner (as lender), the Company (as corporate guarantor), Burwill Commercial Holdings Limited (a wholly owned subsidiary of the Company) (as borrower) for a loan in the principal amount of HK$20,000,000.

The Company is actively seeking legal advice in relation to the Petition and is concurrently in the process of negotiating with the Petitioner for a settlement and an amicable disposal of the matter. As at the date of this announcement, no settlement agreement regarding the Petition has been reached.