Chengdu Xihang Port Industrial Development Investment provides a RMB 875 million loan to Shaanxi Ligeance Mineral Resources to refinance debt used to acquire Gardner Aerospace Holdings (Linked to Record ID#106749)

Project narrative

On November 16, 2016, Shaanxi Ligeance Mineral Resources Co. Limited (SLMR) — a Chinese multinational mining and aerospace company listed on the Shenzhen Stock Exchange — announced that it and its wholly-owned, Chengdu-based subsidiary Chengdu Aerospace Superalloy Technology Co., Ltd. (CAST) would acquire 100% of the equity of Gardner Aerospace Holdings Limited, an England and Wales-based aerospace components manufacturer headquartered in Derby, England, for £326 million GBP ($422 million USD; dom-based aerospace components (metallic detailed parts) manufacturer and a supplier for Airbus, for £326 million GBP ($422 million USD; RMB 2.793 billion) in cash. Gardner is recognized as a leader in Europe for the manufacture of aerospace components (metallic detailed parts) supplied to aerospace original equipment manufacturers (OEM) such as Airbus and airframe and engine manufacturers. Gardner manufactures structural assemblies and parts for the aerospace industry, such as structures and parts for wing spars and fuselage frames. It has five manufacturing facilities in the United Kingdom and other facilities in France, Poland and India from which it supplies a range of products including door components, welded ramps, wing brackets and wing spars. At the time of the acquisition, it employed 1,500 people, including 690 staff in the United Kingdom. Gardner had revenues of approximately £150 million GBP and operating margins of about 20%, and an order book of over €1 billion EUR. The acquisition would be done via SLMR's wholly-owned Hong Kong-incorporated subsidiary Lianshi Investment Co., Ltd.. SLMR originally planned to primarily fund the acquisition through the issuance of shares through private placement after initially doing so through bank loans. On May 11, 2017, Chengdu Shuangliu Xingcheng Construction Investment Co., Ltd. (CXIG) — a Chinese state-owned capital investment and operation firm based in Chengdu wholly-owned enterprise of the State-owned Assets Supervision and Administration and Financial Work Bureau of Shuangliu District, Chengdu — entered into a RMB 1.8 billion loan agreement (known in Chinese as 委托贷款合同（2016 年版)) with SLMR to support its acquisition of 100% of the equity of Gardner Aerospace Holdings. This loan carried a maturity period of 12 months with extension options and a fixed interest rate of 6.37%. SLMR provided a joint and several liability guarantee for the loan. The controlling shareholder of SLMR, Mister Zhang Zheng, also provided a joint and several liability guarantee for the loan, per a guarantee contract dated May 11, 2017 (known in Chinese as 委托贷款保证合 同（2016)). This loan was secured by (i.e. collateralized against) a pledge of 100% of the equity of Chengdu Aerospace Superalloy Technology Co., Ltd. held by SLMR per an equity pledge agreement with CXIG dated May 11, 2017 (known in Chinese as 委托贷款质押合同（2016 年版)) and a mortgage on land assets land assets (certificate number: Shuangguoyong (2016) No. 7003, Sichuan (2016) Shuangliu District Real Estate Right No. 0001080) pledged by SLMR's wholly-owned subsidiary Chengdu Hangyu Super Alloy Technology Co., Ltd., with the Shuangliu Branch of Chengdu Bank Co., Ltd. serving as the collateral agency per a mortgage contract dated May 11, 2017 (known in Chinese as 委托贷款抵押合同（2016 年版)). The proceeds were transferred to SLMR's bank account on May 12, 2017, and then remitted to Lianshi Investment after foreign exchange on May 18, 2017. Record ID#106732 captures the loan. Additionally, on May 31, 2017, Star Space Investment LP — a Cayman Islands-incorporated fund — signed a $160,000,000 USD loan agreement with Lianshi Investment Co., Ltd to finance the acquisition of Gardner Aerospace Holdings. SLMR's Board of Directors approved the acquisition on April 11, 2017. SLMR's shareholders approved the acquisition on May 3, 2017. The acquisition was completed on June 12, 2017. On January 22, 2018, SLMR repaid RMB 200 million and RMB 9,024,166.67 of corresponding interest in advance. Then, on April 28, 2018, the Board of Directors of SLMR approved a loan extension of the remaining RMB 1.6 billion for a period not exceeding one year and a final maturity date of May 3, 2019. Record ID#106747 captures the extension. On October 30, 2018, after raising shares, SLMR issued a non-public offering of shares, allowing it to repay part of the loan principal and interest, with the remaining principal being RMB 776 million. Then, on April 20, 2019, the Board of Directors approved a loan: Chengdu Xihang Port Industrial Development Investment Co., Ltd. — a Chinese state-owned investment company wholly-owned by the State-owned Assets Supervision and Administration and Financial Work Bureau of Shuangliu District, Chengdu — provided a RMB 875 million loan to SLMR to repay and refinance the remaining RMB 776 million of the debt used to acquire Gardner Aerospace Holdings. This loan carried a maturity period of 12 months and a fixed interest rate of 6.37%. Record ID#106748 captures this loan. On March 13, 2020, the Board of Directors of SLMR (now known as Ligeance Aerospace Technology Co., Ltd. (LAT)) approved a loan extension of the remaining RMB 875 million for a period not exceeding one year. Record ID#106749 captures the extension. On April 28, 2021, Chengdu Xihang Port Industrial Development Investment signed a RMB 986.475 million loan with LAT. This loan carried a maturity period of 12 months and a fixed interest rate of 6.37%. The proceeds were to be used to replace the existing loan and for working capital purposes.