Gelonghui November 13th 丨Changan Minsheng Logistics (01292.HK) announced that on August 18, 2022, the Tongnan Branch of Chongqing Changan Minsheng Boyu Transportation Co., Ltd. (“Boyu Tongnan Branch”), a wholly-owned subsidiary of the company, signed a cargo transportation agreement with Nakamura Commodity Trade Yunnan Co., Ltd. (“Nakamura Commodity”) to provide them with coal transportation services. Within 2 months after completion of services under the agreement and reconciliation between the two parties, Nakamura Trade must pay freight charges to Boyu Tongnan Branch. Nakamura Trading is a limited liability company incorporated in China. On the same day, Nakamura Coal Mine (“Nakamura Coal Mine”) in Qujing City, Yunnan Province (“Nakamura Coal Mine”) issued a letter of guarantee (“guarantee letter”) with Boyu Tongnan Branch as the beneficiary, agreeing that Nakamura Coal Mine, as a guarantor, agreed to bear irrevocable joint and several liability guarantees to Boyu Tongnan Branch for all business transactions that occurred during the execution of the agreement. The scope of guarantee included, but not limited to, principal claims, interest, liquidated damages, and expenses for the implementation of claims (including but not limited to) litigation costs, arbitration fees, attorneys' fees, etc.) and all other expenses payable.

After the agreement was signed, on January 6, 2023, Boyu Tongnan Branch fulfilled all rights and obligations in accordance with the agreement. Despite numerous requests, Nakamura Commodity did not pay the full freight as agreed. On the date of the announcement, Nakamura Commodity defaulted on freight charges of RMB 38,7919 million to Boyu Tongnan Branch. On September 8, 2023, the three parties of Boyu Tongnan Branch, Nakamura Products, and Zhongcun Coal Mine reached a civil ruling ((2023) before the Qilin District People's Court of Qujing City, Yunnan Province (“Qujing Court”) (“Qujing Court”), agreeing that Nakamura Commodity will pay the Boyu South Branch's transportation costs of RMB 38.7919 million and capital expenses of RMB 3,0371 million by September 30, 2023. The total cost of the two expenses is RMB 41.1829 million (“outstanding”). The village coal mine is jointly and severally liable for the settlement of arrears.

Since Nakamura Commodity did not pay transportation costs and capital expenses totaling RMB 418.29 million in accordance with the civil ruling, Boyu Tongnan Branch applied to the Qujing Court for execution after repeatedly urging Nakamura Commodity Trade and Nakamura Coal to pay the arrears. On November 6, 2023, the Qujing Court officially accepted the Boyu Tongnan Branch's execution application (case number: (2023) Cloud 0302, No. 6293), demanding that Nakamura Commodity Trade repay the arrears, and that Nakamura Coal Mine bear joint and several guarantee liability to pay the debts owed to Boyu Tongnan Branch.

Currently, the company is actively taking measures to collect arrears from Nakamura Commodity Trade and Nakamura Coal Mine, and will make further announcements in due course so that the company's shareholders and potential investors are aware of any significant developments in the lawsuit.