Shocked! The Overseas Assets Acquired By SEMAR 800 Million Are Only Two Years, And The Debt Exceeds 1.2 Billion, Which Is Now Transferred To Major Shareholders

On July 20, Zhejiang Senma Clothing Co., Ltd. (hereinafter referred to as "SEMAR apparel") announced its intention to sell assets. It plans to sell 100% of the assets and business of France's sofizasas (sofizasas owns 100% equity of the kidiliz group) to the company's third largest shareholder, so as to reduce operational risks and avoid greater loss of performance.

Subsequently, SEMAR apparel received a letter of concern from Shenzhen Stock Exchange, asking for relevant information.

On the evening of July 27, SEMAR clothing made a detailed explanation in reply to the concern letter of Shenzhen Stock Exchange.

All of them include logistics, logistics and sales personnel of the group. After the divestiture, the kidiliz Group continued to operate its business in addition to mainland China, Hong Kong, Macao and Taiwan. As of the end of 2019, SEMAR operates children's wear business in Lebanon, Mongolia, Nepal, Saudi Arabia and Hong Kong. Among the above regions, kidiliz group has no business and does not overlap with the existing children's clothing business of SEMAR. The kidiliz group will not constitute substantial horizontal competition for the existing business of SEMAR.

At the same time of selling the underlying assets and business, SEMAR group undertakes to:

(1) In order to reduce the company's business performance and avoid greater business losses. Therefore, during the period when SEMAR group holds all the assets and businesses of sofiza and its kidiliz group (the "underlying assets and business"), sofiza and its kidiliz group will not carry out new business or expand existing business in China;

(2) Although there is no real horizontal competition, within one year from the date of completion of this transaction, SEMAR group will solve any potential problems of horizontal competition;

(3) During the period of SEMAR group holding the underlying assets and business, if sofiza company and its subsidiary kidiliz group violate the above commitment to carry out new business or expand the original business in China and generate profits, or the SEMAR group obtains any additional income exceeding the transfer price of this transaction due to the underlying assets in the future, SEMAR group agrees to transfer the part of operating profit or income The profits are donated to the listed company free of charge;

(4) If SEMAR group violates the above commitment and causes economic losses to the listed company, it is willing to bear the relevant compensation liability.

The above-mentioned measures will be strictly implemented within the scope of control. Through the above measures and commitments, this transaction is conducive to reducing the company's operational risk, will not affect the normal production and operation of the company, and there is no substantial horizontal competition.

As of June 30, 2020, the principal of the creditor's rights of SEMAR clothing to sofiza and its subsidiaries is 28300000.00 euro, and the interest receivable is 1615521.00 euro. The above creditor's rights total 29915521.00 euro, which is a part of the underlying assets, will be purchased by the SEMAR group with the sale of the underlying assets in the future.

According to the letter of concern in response to Shenzhen Stock Exchange, the reporter of first textile network learned that on April 28, 2018, SEMAR International Group (Hong Kong) Co., Ltd., a wholly-owned subsidiary of Semir apparel, acquired 100% equity and creditor's rights of sofizasas100% held by inchiostrosa in cash on April 28, 2018, so as to achieve the purpose of acquiring all the assets of kidiliz group. Sofizasas owns 100% of the kidiliz group and is the only shareholder of the group.

Before the merger, the business of kidiliz group was mainly located in the European market, mainly in France and Italy, with both retail and wholesale businesses. In recent years, kiliz limited growth in the European market.

After the completion of the acquisition, Semir clothing rapidly promoted the French governance structure adjustment, organization and personnel connection, financial control and other system work, promoted the business communication between the company and the kidiliz group, and carried out business integration work. In February 2019, SEMAR clothing set up a Chinese joint venture company of kidiliz, quickly introduced the main private brands of kidiliz group, CATIMINI brand and absorba brand, and landed in the Chinese market, creating brand connotation and product portfolio in line with the Chinese market, and opening the first batch of flagship stores. Despite the rapid development of China's business, the overall development of the business needs intensive cultivation, which has not had a substantial impact on the operating performance of the kidiliz group in the short term.

In 2018, the French retail industry will continue to suffer a substantial impact on the French retail industry by the end of 2018. The "yellow vest" movement has brought unexpected direct and adverse effects on the operation of kidiliz company, which has a large number of stores in France. The retail and wholesale business continues to be under pressure, disrupting the process of overall business improvement. Kidiliz group has a large operating loss in the year of 2019.

From the end of January 2020, the epidemic broke out in the world, which had a significant impact and adverse impact on the retail industry and clothing industry, and clothing brand companies became the disaster area. The majority of kiliz's retail operations are in Italy and Europe. With the large-scale market closure and personnel isolation policy in Europe, the operation of the kidiliz group began to suffer serious impact and continued to intensify. The relatively large capital gap in Europe leads to a sharp decline in fixed income. Kiliz's actual operation in the first half of 2020 is in a big dilemma.

Faced with the new reality that the European and global epidemic situation will continue to recur for a long time in the future, and will continue to bring significant uncertainty to the operation of the kidiliz group, SEMAR clothing decided to divest the business and assets of the kidiliz group.

In conclusion, based on the need of promoting the development strategy of multiple brands, SEMAR clothing carried out the acquisition of kidiliz group. In the process of project establishment, due diligence, decision-making, approval, information disclosure and post investment operation and management, the board of directors and senior managers of the company made prudent decisions, and the supervisors did their duty of supervision. The company also strictly abided by the relevant laws, regulations and system specifications for information disclosure. In the event that the acquisition fails to reach the expected target, the board of directors, after repeated discussions and prudent decision-making, made a decision to sell the wholly-owned subsidiary and divest the assets and business of the kidiliz group, so as to safeguard the share value of the listed company and the interests of all shareholders.