On January 19th, the first creditors' meeting of Henan Xinfei Electric Appliance Co., Ltd., Henan Xinfei Household Appliances Co., Ltd., and Henan Xinfei Refrigeration Appliance Co., Ltd. (collectively referred to as "Xinfeisan Company") was held online as part of its merger and reorganization process. This marked a significant step in the company's efforts to address its ongoing financial challenges.
In early November 2017, Xinfeisan Company released a reorganization statement, stating that due to intense market competition and declining demand, the company had been operating at a loss for several years. Despite financial support from foreign shareholders, the situation remained critical. Faced with mounting pressures and a strained capital chain, the company was forced to halt production activities. On October 30, 2017, Xinfeisan Company formally applied for reorganization at the Henan Xinxiang Intermediate People’s Court, initiating a legal restructuring process under court supervision.
On November 9, 2017, the Xinxiang Intermediate People’s Court issued rulings (2017) Yu 07 Ren Po No. 6-1, 7-1, and 8-1, accepting Xinfeisan Company’s reorganization application. Then, on November 20, 2017, the court issued (2017) Yu 07 Min Dec No. 6-2, 7-2, and 8-2, designating Beijing Jindu Law Firm as the administrator through an open competitive bidding process.
According to Beijing Jindu Law Firm, Xinfeisan Company has faced severe financial and operational difficulties due to internal and external factors, including large debts, numerous creditors, ongoing litigation, tight cash flow, and challenges in maintaining stable operations for employees, suppliers, and distributors. As of the deadline set by the Xinxiang Intermediate People’s Court on January 5, 2018, a total of 823 creditors submitted their claims, totaling approximately 244.5 million yuan. Creditors who submitted claims after the deadline will still be registered and reviewed, without affecting their substantive rights.
Since Xinfeisan Company has struggled to generate normal revenue through sales, the administrator is focusing on improving cash flow by maintaining current sales, shortening payment cycles, and maximizing cash inflows. The manager is also working to recover outstanding receivables and collect historical payments. Additionally, they are actively seeking investors and exploring financing options, including borrowing and providing liquidity support, to sustain the company’s operations.
Under the supervision of the Xinxiang Intermediate People’s Court, the administrator is intensifying efforts to attract new investors and strengthen the company’s restructuring capabilities. Many well-known domestic and international companies have already expressed interest in participating in the reorganization process.
The date and location of the second creditors’ meeting will be announced once the reorganization process progresses further.
**[Extended Reading]**
- Xinfei Electric has resumed production and has submitted a reorganization application to the court.
- The company is actively seeking strategic partners to stabilize its operations.
- Legal proceedings are ongoing, and stakeholders are closely monitoring developments.
- The reorganization process aims to restore the company’s financial health and ensure long-term sustainability.
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