CEO John McLean7 Jan 2019 10:58
UPDATE 17th DECEMBER 2018
In late November, I visited Inner Mongolia (IM) and met with the Party Secretary in Wulanchabu. He informed me that Wang signed a compensation agreement on 9th November 2017 for 53.55m rmb of which:
13.24m rmb was paid by the government to settle local claims, with the balance to be paid in cash to LVST.
IM Government promised to pay 10m by 15 Nov 2017 (it was paid).
The remaining amount was due to be paid (30m rmb) by Feb 15th 2018.
This amount was not paid by IM as there were claims from a court in Linyi.
Additionally
From what we were told in IM, the Linyi court has accepted claims for about 50m rmb; on top of this, we are aware from the Control Risks report that there is a registered bank charge (against the land) of 16m rmb, however this has not been called as the loan is still current.
To these amounts should be added employee claims (say 10m rmb) and Sorbic’s debt of say 36m rmb (including interest).
The LVST land in Linyi has an estimated value of between 40-80m rmb
Therefore the estimated assets are:
RMB m
IM: 30
Linyi Land 60
Total assets 90
Less Liabilities:
LinStaff 10
Total 90
To prove our debt (Wang’s debt is guaranteed by LVST and Sorbic called the guarantee in May 2018), we have lodged a claim with CEITAC which is due to be heard in late January. Additionally, to help matters, the IM authorities have agreed to freeze any actions/payments until Sorbic’s position is clarified.
The recovery % to Sorbic will be wholly dependent on the success of our arbitration claim and the success of Sorbic’s inclusion in the realisations of the assets of IM and LVST.
John McLean
Chairman
17th December 2018
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