Financial issues scupper Safbon support deal

摘要

On 16 October, Shenzhen-listed systems integrator Shanghai Safbon Water Service announced that it had failed to reach an agreement with state-owned investor Zhuhai Water Environment Holdings Group on the proposed sale of a majority stake. Safbon's critical financial issues are likely to be the main reason behind the move. With its 2019 net profit around half the level achieved in 2017, it has continued to see a poor performance in the first half of 2020, as revenue and net profit dropped by 30% and 84% year-on-year to RMB488 million ($73 million) and RMB16 million ($2.4 million), respectively. Worse still, the company is struggling to complete the RMB533 million ($80 million) repayment of a bond issued in 2017. It ended up paying only RMB133 million ($20 million) by the 19 October due date, and has yet to reach a debt reconciliation agreement with the remaining investors.