AnnouncementRelatingtoDebtReorganizationsDuringNormalOperationof BusinessInvolvingPartialRelatedTransactions TheCompany,allthemembersoftheBoardofDirectors,supervisorsandtopmanagementherebyguaranteethetruth,accuracyandcompletenessoftheinformationdisclosure,noanyfalserecords,misleadingstatementsandmajormissingcontents. I.Overviewofdebtrestructuring 1.Earningsfromdebtrestructuring Inordertooptimizethecorporatedebtstructureandimprovetheefficiencyoffunduse,WafangdianBearingCompanyLimited(hereinafterreferredtoas“theCompany”)carriedoutclean-upworkonthepayablesofthedailyoperationsofthecompanyfromJulytoDecember2018.Duringthisperiod,theCompanysignedthe“DebtRestructuringAgreement”with31suppliersincludingZWZBearingPrecisionForgingCo.,Ltd.andBejingAoBaoAoDiamondTechnologyCo.,Ltd.Afterfriendlynegotiation,thesuppliersofthispartagreedtomakeconcessionsontheCompany’sdailyoperatingdebt,andtheabove-mentionedbusinessachieveddebtrestructuringincomeof4,016,620.91YuanfortheCompany;2.Debtrestructuringloss 1）Debtrestructuringlossesconfirmedbybothparties ThecompanyhassignedtheDebtRestructuringAgreementwithZWZBearingPrecisionForgingCo.,LTDandShenhuaWuhaienergyCo.,LTD.Afterfriendlynegotiation,thecompanymadeconcessionstothebearingreceivablesowedbyUnitedPowertotheCompany,andtheabove-mentionedbusinessmadedebtrestructuringlossesof730,889.89YuanfortheCompany. 2）Debtrestructuringlossesduetocustomerbankruptcyreorganization (1)DuetothebankruptcyreorganizationofChongqingIronandSteelCo.,LTD.,thecompany'scustomer,thereceivablebearingpaymentcouldnotbefullyrecovered,resultinginadebtrestructuringlossof478,411.65yuan.Thedetailsareasfollows: ChongqingIronandSteelCo.,LTD.owesthecompanythepaymentforgoodsbeforeitsreorganization,ourcompanydeclaredandconfirmedthecreditor'srightbythemanageroftheotherpartyis1,463,605.27yuan.Thesettlementschemeofordinarycreditor'srightsinchongqingironandsteelreorganizationplanisasfollows:thecreditor'srightsunder500,000yuan(including500,000yuan)ofeachordinarycreditorshallbesettledincashin100%proportion;Theremainingamountof963,605.28yuanissettledintheformof debt exchange for shares according to the settlement ratio of 58.844978%, namely 963,605.28*58.844978%=567,033.3037yuan.Thispartofchongqingironandsteelispricedat3.68yuanpershare,soitisequivalentto154,086shares. (2)AccordingtothedebtrestructuringplanoftheBohaiSteelGroup(BohaiSteelGroupisthenameofthe48enterprisesincludingtheBohaiSteelGroup,TiangangGroup,TiantieGroupandMetallurgicalgroupenteringtherestructuringprocess).Thecompany'sreceivableamountofRMB3,003,766.92willbepaidoffthroughcash,debt-for-equityswapandbeneficialshareofthetrust.Accordingtotherestructuringplanofthebohaisteelgroupenterprise,thespecificsettlementplanofthecompanyisasfollows:RMB500,000cashsettlement;Oftheaccountsreceivableexceeding500,000yuanormore,1,301,958.80yuanwasliquidatedthroughdebt-for-equityswapsofabout52%onthesteelassetplatform(CurrentBohaiSteelGroup).1,2010,808.12yuanshallbepaidoffbyabout48%ofthebeneficialrightshareofthetrust Theabovebusinesseshaveatotalimpactonthecompany'scurrentprofitandlossof2,807,319.37yuanin2018.Theimpactofdebtrestructuringonthecompany'sprofitandlossofBohaiSteelGroupwillbeincludedintheyear2019andbeyond.Thespecificamountisnotyetdetermined,whichshallbedeterminedaccordingtotheoperationoftheplatformonwhichthedebt-for-equityswapandtrustinvestmentpartarebased. 3.Because7suppliersincludingZWZBearingPrecisionForgingCo.,LTD.and1customerarethewholly-ownedsubsidiaryofthecompany'slargestshareholder,transactionsinvolvingthispartconstituteaffiliatedtransactions. 4.Theproposalwasreviewedandunanimouslyapprovedbythe9thmeetingoftheseventhboardofdirectorsofthecompany.Whentheconsiderationinvolvingrelatedtransactions,therelateddirectors,MengWei,SunMaolin,ZhaoYang,ZhangXinghai,ChenJiajunandSunNajuan,avoidedtheconsideration,otherdirectorsallvotedyesforthismatter,therewasnonegativevotenorabstentionvote.Theindependentdirectorsofthecompanyissuedanindependentdirectors’opiniononthismatter. 5.AccordingtoArticle10.2.5oftheStockListingRulesoftheShenzhenStockExchange:Transactionsbetweenalistedcompanyanditsaffiliates(otherthancashassetsandguaranteesgrantedtothelistedcompany)amounttomorethanRMB30million,andrelatedpartytransactionsaccountingformorethan5%oftheabsolutevalueoftheauditednetassetsofthelistedcompanyinthelatestperiod,Inadditiontotimelydisclosure,itshall,inaccordancewiththeprovisionsofarticle9.7oftheserules,employintermediariesqualifiedtoengageinsecuritiesandfuturesrelatedbusinessestoevaluateorauditthesubjectmatterofatransactionandsubmitthetransactiontothegeneralmeetingofshareholdersforreview.Theamountinvolvedinthisaffiliateddebtrestructuringismorethan30millionyuan,andaccountsfor5.35%ofthecompany'slatestauditednetcapital,soitneedstobesubmittedtotheshareholders'meetingforreviewandapproval. Therefore,thetransactionobjectinvolvedinthisbusinessistherelatedtransactionrelatedtodailyoperationsmentionedinarticle10.2.11ofthe"rulesonstocklisting",soitcanbeexemptedfromconsiderationorevaluation. Thisbusinessdoesnotconstitutethematerialassetsreorganizationstipulatedinthemeasuresfortheadministrationofmaterialreorganizationoflistedcompanies. 6.Thisdebtrestructuringisadebtrestructuringofthenatureofdailyoperation,thereisnomajorlegalobstaclesintheimplementationofeachparty. IIThebasicsituationofthedebtrestructuringparty 1.Thereareatotalof31suppliersand4customersinvolvedinthisdebtrestructuring.Thedebtrestructuringthatthecompanyagreedwiththerelatedpartiesandthedebtrestructuringthatthecompanyagreedwiththethird-partysuppliersareindependentandarenoteachother’spremise,anddonotconstituteonepackagedeal. 2.Thereisnopossibilitythatthedebtrestructuringpartyhasotherrelationshipswiththecompanyandthetoptenshareholdersofthecompanyinthepropertyrights,business,assets,creditanddebt,personnel,etc.whichmayormayhavecausedthecompanytoinclinetoitsinterestsorcausedittoinclinetothecompany’sinterests.Thecompanycarriesthroughallthedebtrestructuringinafair,justandnon-discriminatorymanner.Amongthem,thebasicsituationofthetoptwosuppliersinvolvingthelargeramountisasfollows: (i)ZWZPrecisionForgingCo.,Ltd. 1.TypeofEnterprise:LimitedLiabilityCompany 2.EnterpriseAddress:No.1,Section1,BeigongjiStreet,WafangdianCity,LiaoningProvince 3.LegalRepresentative:WangLongjie 4.RegisteredCapital:24.45millionYuan 5.DateofEstablishment:June16,2004 6.BusinessScope:forgingproductsprocessing,mechanicalpartsprocessing;forgingequipmentmaintenance;forgingannealing;forgingprocessdesign;salesofmetalmaterials 7.MainfinancialindicatorsasofDecember31,2018:totalassetsof466,159,000Yuan,totalliabilitiesof308,497,400Yuan,netassetsof157,661,600Yuan;onDecember31,2018,accumulatedoperatingincomeof522,237,600Yuan,andnetprofitof6,472,500Yuan. 8.Notthedishonestpersonsubjectedtoexecution (ii)WafangdianBearingGroupWindpowerBearingCo.,Ltd. 1.TypeofEnterprise:LimitedLiabilityCompany 2.EnterpriseAddress:No.1,Section1,BeigongjiStreet,WafangdianCity,LiaoningProvince 3.LegalRepresentative:ZhangXinghai 4.RegisteredCapital:200millionYuan 5.DateofEstablishment:June13,2007 6.BusinessScope:bearingmanufacturingandsales;housingandmechanicalequipmentleasing;importandexportofgoodsandtechnology;researchanddevelopmentandinformationofwindpowerbearingtechnology;operationandmaintenanceofwindturbines(exceptforprojectsprohibitedbylawsandadministrativeregulations;projectsrestrictedbylawsandadministrativeregulationscanbeoperatedafterobtainingthelicense)(Projectssubjecttoapprovalaccordingtolawcanbecarriedoutafterapprovalbyrelevantdepartments) 7.MainfinancialindicatorsasofDecember31,2018:totalassetsof933,644,100Yuan,totalliabilitiesof522,205,900Yuan,netassetsof411,438,200Yuan;onDecember31,2018,accumulatedoperatingincomeof264,891,700Yuan,andnetprofitof-2,095,500Yuan. 8.Notthedishonestpersonsubjectedtoexecution (III)WafangdianBearingPrecisionRollingElementCo.,Ltd. 1.TypeofEnterprise:LimitedLiabilityCompany 2.EnterpriseAddress:No.1,Section1,BeigongjiStreet,WafangdianCity,LiaoningProvince 3.LegalRepresentative:ZhangShiyin 4.RegisteredCapital:20millionYuan 5.DateofEstablishment:September1,2016 6.BusinessScope:Rollingbodydesign,manufacturingandsales,housing,equipmentrental(Projectssubjecttoapprovalaccordingtolawcanbecarriedoutafterapprovalbyrelevantdepartments) 7.MainfinancialindexesasofDecember31,2018:totalassets:86,368,000yuan,totalliabilities:119,217,100yuan,netassets:-32,849,100yuan;OnDecember31,2018,theaccumulatedoperatingincomewas185,973,800yuan,andthenetprofitwas-22,031,500yuan. 8.Notthedishonestpersonsubjectedtoexecution (IV)DalianWafangdianBearingGroupBearingEquipmentManufacturingCo.,Ltd. 1.TypeofEnterprise:LimitedLiabilityCompany 2.EnterpriseAddress:No.1,Section1,BeigongjiStreet,WafangdianCity,LiaoningProvince 3.LegalRepresentative:ChenJiajun 4.RegisteredCapital:16.736millionYuan 5.DateofEstablishment:June14,1996 6.BusinessScope:Manufacture,transformationandmaintenanceofbearingequipmentandvariousspareparts;Automationlineengineeringmanufacture;Variousmachiningequipmentandmaintenance;Manufactureandmaintenanceofbearingmolds,measuringtools,cuttingtoolsandinstruments;VarioustypesofCNCrotarytablemanufacturing;Electricalengineeringconstruction,pipelineengineeringconstructionandmaintenance,industrialbuildinglighting;Installationandmaintenanceofhydropowerprojects,andmaintenanceofbuildings(iftheabovequalificationsareinvolved,operatingonthecertificateofassets);installationandmaintenanceofconstructionmachinery;Installationofvariousequipment;Variouskindsofrivetingweldingprocessing.(Projectssubjecttoapprovalaccordingtolawcanbecarriedoutafterapprovalbyrelevantdepartments) 7.MainfinancialindicatorsasofDecember31,2018:Totalassetswere91,120,600yuan,totalliabilitieswere60,097,100yuanandnetassetswere31,023,500yuan.OnDecember31,2018,theaccumulatedoperatingincomewas40,717,500yuanandthenetprofitwas-6,296,900yuan. 8.Notthedishonestpersonsubjectedtoexecution (V)WafangdianBearingPrecisionCageCo.,Ltd. 1.TypeofEnterprise:LimitedLiabilityCompany 2.EnterpriseAddress:No.1,Section1,BeigongjiStreet,WafangdianCity,LiaoningProvince 3.LegalRepresentative:ZhangShiyin 4.RegisteredCapital:10millionYuan 5.DateofEstablishment:September1,2016 6.BusinessScope:Maintenancerackdesign,manufacturingandsales,housing,equipmentrental(Projectssubjecttoapprovalaccordingtolawcanbecarriedoutafterapprovalbyrelevantdepartments) 7.MainfinancialindexesasofDecember31,2018:totalassetsof30,447,100yuan,totalliabilitiesof29,435,600yuan,netassetsof1,011,500yuan;OnDecember31,2018,theaccumulatedoperatingincomewas70,009,900yuanandthenetprofitwas-4,141,200yuan. 8.Notthedishonestpersonsubjectedtoexecution (VI)WafangdianTongdaBearingManufacturingCo.,Ltd. 1.TypeofEnterprise:LimitedLiabilityCompany 2.EnterpriseAddress:No.1,Section1,BeigongjiStreet,WafangdianCity,LiaoningProvince 3.LegalRepresentative:SunMaolin 4.RegisteredCapital:3.2millionYuan 5.DateofEstablishment:January1,1985 6.BusinessScope:Bearingmanufactureandrepair;Manufacturingofplasticpackagingbags,knittinggloves,mechanicalprocessinganddistribution(Foritemssubjecttoapprovalaccordingtolaw,businessactivitiescanonlybecarriedoutafterapprovalbyrelevantdepartments) 7.MainfinancialindexesasofDecember31,2018:totalassets:107,285,800yuan,totalliabilities: was155,675,600yuanandthenetprofitwas4,306,800yuan. 8.Notthedishonestpersonsubjectedtoexecution (VII)WafangdianBearingGroupEngineringTechnologyResearchCenterCo.,Ltd. 1.TypeofEnterprise:LimitedLiabilityCompany 2.EnterpriseAddress:Bearingindustrialpark,WafangdianCity,LiaoningProvince 3.LegalRepresentative:WangLongjie 4.RegisteredCapital:10millionYuan 5.DateofEstablishment:April2,2014 6.BusinessScope:Bearingproductdesign,processdesign,testing,computerapplicationdevelopment,bearingspecialmachinedevelopmentdesign,scientificresearchconsultingservices(Projectssubjecttoapprovalaccordingtolawcanbecarriedoutafterapprovalbyrelevantdepartments) 7.MainfinancialindicatorsasofDecember31,2018:Totalassetsamountedto57,113,900yuan,totalliabilitiesamountedto45,602,900yuanandnetassetsamountedto11,511,000yuan.OnDecember31,2018,theaccumulatedoperatingincomewas24,125,600yuanandthenetprofitwas-1,531,500yuan. 8.Notthedishonestpersonsubjectedtoexecution (VIII)WafangdianBearingGroupHigh-endAutomobileBearingCo.,LTD 1.TypeofEnterprise:LimitedLiabilityCompany 2.EnterpriseAddress:No.1,Section1,BeigongjiStreet,WafangdianCity,LiaoningProvince 3.LegalRepresentative:MengWei 4.RegisteredCapital:68millionYuan 5.DateofEstablishment:October13,2015 6.BusinessScope:Bearingdesignanddevelopment,manufacturing,marketing;Importandexportofgoodsandtechnologies(Projectssubjecttoapprovalaccordingtolawcanbecarriedoutafterapprovalbyrelevantdepartments) 7.MainfinancialindexesasofDecember31,2018:totalassets:431,240,700yuan,totalliabilities:468,378,300yuan,netassets:-37,137,600yuan;OnDecember31,2018,theaccumulatedoperatingincomewas550,014,800yuanandthenetprofitwas-64,526,300yuan. 8.Notthedishonestpersonsubjectedtoexecution IIIDebtrestructuringplanandthemaincontentsofdebtrestructuringagreement 1.Debtformation Accountingbythecompanyandthefinancialpersonnelof31suppliers,theCompanyshouldpaythepurchasepaymentsandprojectfundsforatotalofRMB84,804,773.68Yuantotheabove-mentionedsuppliers. Afteraccountingwiththefinancialstaffof4customers,theCompanyshallreceivethebearingpaymentofRMB17,654,419.65yuanfromtheabove-mentionedcustomers.ChongqingIronandSteelCo.,LTD.Bankruptcyreorganization,receivablebearing1,463,605.27yuancannotbefullyrecovered;DebtrestructuringofBohaiSteelGroupCo.,LTD.Thecompany'sreceivableamountofRMB3,003,766.92yuanwillbepaidoffthroughcash,debt-for-equityswapandbeneficialshareofthetrust. 2.Maincontentsofthedebtrestructuringplan Aftercommunicatingandnegotiatingwiththecreditors,accordingtotheDebtRestructuringAgreementrespectivelysignedbytheCompanyand31suppliers,inlinewiththeprincipleofmutuallybeneficialcooperation,thecreditorsagreedtoabandonthecreditor’srightsofpartofthepaymentforgoods,andtheremainingpaymentcouldbepaidtothecreditorsbythecompanyintheformofcommercialpapersandbankdeposits.Afterthecreditorsreceivedthepayment,thecreditanddebtofbothpartiesinvolvedinthecontractaresettled,andtherearenoothereconomicdisputes. FromJulytoDecember2018,thecompanycompleteddebtrestructuringwith84,804,773.68yuan,andactuallypaid80,785,018.80yuanforgoods,realizingdebtrestructuringincomeof4,016,620.91yuan. Afterthecommunicationandnegotiationbetweenthedebtorandthecompany,accordingtothe"DebtRestructuringAgreement"signedbythecompanyandthreecustomers,inlinewiththeprincipleofcooperationandreciprocity,thecompanyagreestogiveupthecreditor'srightsofpartofthebearingamount.FromJulytoDecember,2018,thecompanycompletedthedebtrestructuringwith17,176,008.00yuan,andactuallyreceived16,445,118.11yuanofpaymentforgoods,resultinginadebtrestructuringlossof730,889.89yuan. AfterthebankruptcyreorganizationofChongqingIronandSteelCo.,LTD.,thecompanyshalldeductthe500,000yuanpaidtothecompanyaccordingtothereorganizationplanandpayoff567,033.3037yuanintheformofsharesanddebts,resultinginadebtrestructuringlossof478,411.65yuan. ThedebtoftheBohaiSteelGroupenterpriseisrestructured.Thecompany'sreceivableamountofRMB3,003,766.92yuanshallbepaidoffthroughcash,debt-for-equityswapandbeneficialshareofthetrust.Oftheaccountsreceivableexceeding500,000yuanormore,1,301,958.80yuanwasliquidatedthroughdebt-for-equityswapsofabout52%onthesteelassetplatform(CurrentBohaiSteelGroup).1,2010,808.12yuanshallbepaidoffbyabout48%ofthebeneficialrightshareofthetrustonthenon-steelassetplatform(ThepredecessorBohaiSteelGroup).Thespecificamountofthecompany'sprofitandlossisstilluncertain,whichneedstobedeterminedaccordingtotheoperationoftheplatformonwhichthedebt-for-equityswapandtrustinvestmentpartarebased. 3.Thereisnocaseinvolvingunderlyingassetssuchasrepayingdebtswithnon-cashassetsinthisdebtrestructuring. IVOtherarrangementsfordebtrestructuring Thisdebtrestructuringdoesnotinvolvefollow-uparrangementssuchaspersonnelplacement,landlease,relatedtransactions,horizontalcompetitionandsoon. VThereason,purposeofdebtrestructuringanditsimpactonthecompany Debtrestructuringofthemaincausesofitisduetotheinfluenceofmarketenvironment,enterprisesintheshorttermcapitalrelativelynervous,inordertoalleviatethepressureofthecapital,agreedwiththesupplier,inthelevy,apercentageofthedownpayment,thedeterminationofthediscountisrelatedintheirbusiness,bothsidescanwithstandrangedeterminedbynegotiation;Second,duetothebankruptcyreorganizationofcustomers,fromtheperspectiveofmaximizingtheinterestsofthemaintenancecompany,acceptedreceivablescollectionprogram.Exceptforthecontentofthereorganizationagreement,therearenootheragreementsandarrangementsnotdisclosed.Debtrestructuringinvolvingrelatedpartiesshallnotbetreatedasanequitytransaction. ThesubsequentpaymentarrangementwillbemadebytheCompanytakingintoaccount(i)theamount period.ThecapitalismainlysourcedfromtheactualcapitalcollectedbytheCompanyfromsalesofbearingproducts,whichbelongstonormalcapitalpaymentbusiness,thusbringsnoimpactontheCompany’snormaloperation. Throughdebtrestructuring,thecompanyfurthersortedoutitscreditanddebtrelationship,relievedthecapitalpressure,easedthecompany’sdebtburden,optimizedthedebtstructure,improvedthecompany’sfinancialstatus,andhelpedthecompany’sbusinessdevelopment. AccordingtotherelevantprovisionsoftheAccountingStandardsforBusinessEnterprises,theincomeofRMB2,807,319.37yuanfromthisdebtrestructuringwillbeincludedinnon-operatingincome. VIDocumentsforreference 1.BoardResolution. 2.ResolutionoftheBoardofSupervisors. 3.Independentdirector’sopinion. 4.OtherdocumentsrequiredbytheShenzhenStockExchange. Herebynotified BoardofdirectorofWafangdianbearing Companylimited April29.2019