China Eximbank provides RMB 1.241 billion loan to Shanghai Shenda Co., Ltd. for its acquisition of a 70% ownership stake in Auria Solutions Limited

Project narrative

On September 8, 2017, the Shanghai Branch of the Export-Import Bank of China signed a RMB 1.652 billion five-year loan agreement with Shanghai Shenda Co., Ltd. (a Chinese textile company). RMB 1.241 billion ($189.84 million USD) of the loan proceeds were to be used by Shanghai Shenda to support the acquisition of a 70% ownership stake in Auria Solutions Limited (Newco). This loan was supported by a joint liability guarantee contract signed by Shanghai Textile Investment Management Co., Ltd. (under the control of state-owned Orient International (Group) Co., Ltd.) and Shanghai Shenda Co., Ltd. with China Eximbank. This loan was secured by (i.e. collateralized against) a first fixed charge over the 42% of the issued share capital of Auria Solutions Limited per a charge over shares charged by Shenda Investment UK Limited — an England and Wales-incorporated subsidiary of Shanghai Shenda — as charged in an a charge over shares deed dated April 26, 2018 to the Shanghai Branch of China Eximbank. This loan was also supported by a negative pledge by Shenda Investment UK over the shares it holds in Auria Solutions Limited. In June 2017 the South Africa Competition Commission approved the proposed merger between Shenda Investment UK, owned by Shanghai Shenda, and Auria Solutions Limited, a British company owned by International Automotive Components Group Europe S.a.r.l (Luxembourg) (IAC S.a.r.l), itself controlled by International Automotive Components Group SA (Luxembourg) (IAC SA). Because Shenda failed to disclose the equity pledge in several financial reports, including the 2019 and 2020 annual reports, the Shanghai Supervision Bureau of the China Securities Regulatory Commission sent a warning letter to the company on regulatory violations. By 2022, the loan had been repaid.