ST Hezhong Holdings Subsidiary Loan Default, Company Required to Fulfill Guarantee Responsibilities

ST Hezhong announced that its holding subsidiary, Jiangsu Hezhong Smart Energy Co., Ltd., has two overdue loan matters: first, it owes Nanjing Bank Chengdong Branch a principal of 8.6 million yuan and corresponding interest, and this loan is not secured; second, it owes Industrial and Commercial Bank of China Nanjing Sanshan Street Branch a principal of 9.4 million yuan, and the bank requires the company to fulfill a joint liability guarantee obligation with a maximum balance not exceeding 11.88 million yuan. As of the announcement date, the company has not yet assumed the guarantee responsibility and has not received any related litigation or preservation notices. These two loan principals account for 7.18% and 7.85% of the company's most recent audited net assets, respectively, which will increase the short-term debt repayment pressure on the company and its subsidiaries. If not properly resolved, it may face risks such as litigation.

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