Click to read the original article for details. One path has been blocked; with only half a year left, what is Huiyuan's next step? Huiyuan Juice, once a household "national beverage," has encountered repeated twists and turns in its "romantic journey" over the years: at its peak in 2008, it narrowly missed a deal with international beverage giant Coca-Cola. Eleven years later, in April 2019, after years of losses and difficult operations, it was just about to "marry" Tiandi No.1, but soon parted ways again. The marriage with Tiandi No.1 falls through On the evening of July 16, Huiyuan Juice (01886.HK) announced that after detailed and careful consideration by the parties, the company believed that the conditions for further advancing the transactions contemplated under the agreement might not yet be mature. The cooperation framework agreement was valid for 60 days from its signing date. Since the parties did not enter into a final agreement within that 60-day period, the cooperation framework agreement automatically terminated and no longer has any effect. Subsequently, Tiandi No.1 also issued an announcement on the NEEQ (National Equities Exchange and Quotations) regarding the termination of the major asset restructuring. The announcement stated that the company's board of directors had reviewed and approved the termination of the previously disclosed major asset restructuring. Due to the previously disclosed major asset restructuring plan, the company's shares were suspended from trading from the opening of the market on April 24, 2019, with the resumption date no later than July 23, 2019. In the above announcement, Tiandi No.1 stated that, based on the company's strategic planning and after careful study by all parties, the conditions for advancing the major asset restructuring at this stage were not yet mature. To protect the interests of all shareholders, and after friendly consultation, it was decided to terminate the major asset restructuring. It is understood that on April 26 this year, Huiyuan Juice signed an "Investment Cooperation Framework Agreement" with Tiandi No.1 and Guangzhou Hezhi to establish a joint venture. According to information disclosed by Huiyuan Juice, Tiandi No.1 and Guangzhou Hezhi would hold 60% equity, and Beijing Huiyuan would hold 40%. Under the cooperation framework agreement, the potential joint venture partners would contribute 3.6 billion yuan in cash to the potential joint venture; Huiyuan would contribute 2.4 billion yuan in assets, including the registered trademark of the "Huiyuan" brand. At the same time, Huiyuan Juice would provide the joint venture and Tiandi No.1 with raw materials for juice production and contract manufacturing services. Regarding the cooperation at that time, Tiandi No.1 founder Chen Sheng also publicly told the media: "The cooperation between Tiandi No.1 and Huiyuan is a strong alliance of complementary advantages between China's fruit vinegar giant and China's juice giant." Huiyuan Juice also stated in its announcement at the time that through the cash from the potential asset transaction with the potential joint venture and the ongoing operating cash flow from long-term cooperation with potential partners, it expected its "cash position to improve and ease its debt situation." However, the good times did not last. The cooperation, once favored by both parties and the industry, collapsed less than a hundred days after it was proposed. In this regard, Zhu Danpeng, a Chinese food industry analyst, said that the collapse of this cooperation would not cause significant losses to Huiyuan. Huiyuan will continue to seek more strategic investment cooperation on the capital side in the future, which will greatly support its sustainable development. A bumpy road under a mountain of debt It is understood that this is not the first time Huiyuan Juice has failed in a "marriage." As early as 2008, just over a year after listing, Huiyuan Juice received a takeover offer from Coca-Cola. At that time, Coca-Cola planned to acquire all shares of Huiyuan Juice at HK$12.2 per share, with a total price of about HK$17.92 billion. However, it fell through due to antitrust review, which became a turning point for Huiyuan Juice from prosperity to decline. After that, to expand product categories, Huiyuan Juice began to expand factory capacity, take out loans, and expand factory capacity. But this approach did not play a significant role; instead, it burdened Huiyuan Juice with the financial burden of blind expansion. Data shows that from 2014 to 2017, Huiyuan Juice's debt levels were 6.535 billion yuan, 7.662 billion yuan, 9.995 billion yuan, and 11.403 billion yuan, respectively. Currently, Huiyuan Juice has failed to release performance reports for two consecutive years (2017 and 2018), and its 2017 interim results showed that its debt had reached 11.4 billion yuan. As of June 30, 2017, Huiyuan Juice's debt ratio was as high as 82.5%. In 2019, four bonds totaling 3 billion yuan were due to mature. The termination of this cooperation undoubtedly adds insult to injury for Huiyuan, which is deeply mired in a debt crisis. On April 3, 2018, due to the illegal loan of 4.275 billion yuan to its unlisted subsidiary Beijing Huiyuan, which violated the Hong Kong Stock Exchange listing rules regarding connected transaction reporting, shareholder approval, and disclosure, Huiyuan Juice suspended trading on the Stock Exchange of Hong Kong, which later automatically turned into a suspension that continues to this day, and it has delayed performance reports for two consecutive years. If Huiyuan Juice fails to meet the resumption conditions set by the Hong Kong Stock Exchange by the end of January 2020, it will face delisting. Zhu Danpeng once told China Net Finance reporters that Huiyuan's debt of over 10 billion yuan and illegal borrowing were mainly due to Huiyuan being in the layout phase of its full industry chain. "Zhu Xinli focused on the agricultural sector, which is an asset-heavy operation model with a relatively high capital occupation rate." Source: China Net Finance