Chenming Paper plans to spin off its financial leasing business for 3.3 billion yuan
On the evening of December 12, Chenming Paper announced that in order to further focus on the development strategy of its pulp and paper main business and promote high-quality development, the company plans to divest all assets related to its financial leasing business.
Specifically, Chenming Paper will transfer, through an agreement, the 100% equity of Shandong Chenming Financial Leasing Co., Ltd. held by its wholly-owned subsidiary Chenming (Hong Kong) Co., Ltd., 25% equity of Qingdao Chenming Nonghai Financial Leasing Co., Ltd. (now renamed 'Qingdao Chenming Paper Products Sales Co., Ltd.'), 25% equity of Shanghai Chenming Financial Leasing Co., Ltd., as well as the up to 2.263 billion yuan debt held by its controlling subsidiary Zhanjiang Chenming Paper Co., Ltd. against Shandong Chenming Financial Leasing Co., Ltd., to Shengjia Investment Co., Ltd., a wholly state-owned enterprise under the Shouguang Municipal Finance Bureau.
The total transfer price of this transaction is 3.336 billion yuan, including 1.073 billion yuan for the equity transactions and 2.263 billion yuan for the debt transactions. After the completion of the transaction, Shandong Chenming Financial Leasing Co., Ltd., Qingdao Chenming Nonghai Financial Leasing Co., Ltd., and Shanghai Chenming Financial Leasing Co., Ltd. will no longer be included in Chenming Paper's consolidated financial statements. Chenming Paper will no longer engage in any financial leasing business.
The direct reason for this divestment is the huge losses in the financial leasing business. Financial data shows that in the first three quarters of 2025, the three leasing companies together recorded losses exceeding 4.5 billion yuan. Among them, Shanghai Chenming Leasing Co., Ltd. already has negative net assets. Completely divesting this business will help purify Chenming Paper's financial statements.
It is reported that Shouguang Shengjia Investment Co., Ltd., as a state-owned enterprise, has good creditworthiness and strong performance capability. To support Chenming Paper's resumption of work and production, the Shouguang municipal government has provided partial funding and guarantees. In view of the current situation, in order to ensure the smooth progress of the transaction and the effective execution of the contract, and taking into account the status of underlying assets in the financial leasing business and the progress of receivables collection, both parties have agreed to adopt an installment payment method as the form of payment.
Chenming Paper stated that this transaction aligns with the company's overall development strategy, helps optimize its asset-liability structure, revitalizes existing assets, and allows for the concentration of resources on developing its core business, thereby enhancing the company's profitability and core competitiveness.
After divesting all assets related to its financial leasing business, Chenming Paper will successfully shed its burdens and move forward unencumbered, with the potential to restore its glory in the paper industry.
Currently, Chenming Paper's Huanggang production base and the second plant of the Jiangxi base have resumed normal operations, while the Shouguang and Jilin production bases have fully restarted production. Regarding the Zhanjiang base, the company is actively carrying out inspections and preparing materials, aiming to meet the conditions for resuming production by the end of the year. These measures indicate that Chenming Paper is concentrating its resources on its core business and steadily moving toward a new stage of development.