Restructuring of TISCO Wanbang Company

The Jinzhong Intermediate People's Court of Shanxi Province (hereinafter referred to as the "Jinzhong Court") issued Decision No. 1 (2025) Jin 07 Bankr. App. (Pre) on March 19, 2025, deciding to initiate pre-reorganization proceedings for TISCO Wanbang Furnace Charge Co., Ltd. (hereinafter referred to as "TISCO Wanbang"). On the same day, the court issued Decision No. 1-1 (2025) Jin 07 Bankr. App. (Pre), appointing Shanxi Huaju Law Firm and the Jinzhong Branch of Wenzhou Zhongke Enterprise Liquidation Law Firm Co., Ltd. as the temporary administrators during the pre-reorganization period of TISCO Wanbang (hereinafter referred to as the "Temporary Administrators").

To introduce qualified investors to resolve debts, effectively revitalize assets, rescue the enterprise, restore TISCO Wanbang's production and operation, improve production technology, enhance the local industrial structure, maintain local economic and social stability, enable the enterprise to return to a sound development track, and ultimately maximize the protection of the legitimate rights and interests of all creditors, the administrators plan to inject funds into TISCO Wanbang by introducing investors to assist in completing the subsequent reorganization procedures. In accordance with the Enterprise Bankruptcy Law and relevant legal provisions, the administrators are publicly promoting the main assets under the name of TISCO Wanbang to the public. The promotion contents are as follows:

I. Overview of TISCO Wanbang

II. Introduction to the Basic Information of TISCO Wanbang

(1) Advantages in Process Equipment

1. Advanced and Mature Process Equipment

TISCO Wanbang adopts advanced, environmentally friendly, energy-efficient, and mature processes and key equipment technologies introduced from Outokumpu, Finland, to produce ferrochrome alloy products. The ferrochrome production process introduced in 2011 was the first of its kind in China's ferroalloy industry, driving progress in the industry's equipment technology. The main production process is the "steel belt roasting furnace + 75MVA large-scale fully enclosed submerged arc furnace process with a preheating vertical kiln." The process flow begins with the transportation of chrome ore fines from the port to the factory, followed by batching, pelletizing of chrome ore fines, roasting, preheating in a vertical kiln, smelting in a submerged arc furnace, tapping, casting, crushing, and finally, the finished products are stored and sold.

The company owns the largest domestic production line for chrome ore pellet roasting with an annual output of 700,000 mt of small chrome ore pellets on a steel belt, as well as a 75MVA fully enclosed submerged arc furnace ferrochrome alloy smelting production line with an annual output of 300,000 mt of preheated vertical kilns. In the chrome ore pellet roasting process, the main equipment of the chrome ore pellet roasting production line on a steel belt includes an MQY5083 overflow ball mill, a ceramic filter, an Eirich intensive mixer, etc. The inner diameter of the ball mill's cylinder reaches 5,030mm, with an effective volume of 153.3m³, equipped with a 3,600kW main motor, enabling efficient processing of chrome ore fines. The ceramic filter has an effective filtration area of 80m², with an operating vacuum degree of -0.7MPA to -0.9MPA, enabling precise dewatering and ensuring pellet quality. In terms of ferrochrome smelting, the 75MVA fully enclosed submerged arc furnace with a preheating vertical kiln is the core equipment, with supporting rotating distributors, preheating kilns, submerged arc furnaces, etc., operating in coordination. The preheating kiln has a designed power of 12MW and a rated capacity of 55t/h, which can effectively reduce smelting power consumption and improve production efficiency by preheating the furnace charge.

In addition, to further enhance resource utilization and energy efficiency, TISCO Wanbang has also constructed supporting systems for cogeneration, slag treatment metal recovery, and solid waste treatment and recycling. Meanwhile, pollution control facilities have been constructed, with "three wastes" treatment meeting environmental protection requirements.

The company actively carries out ultra-low emission transformation and environmental governance. The completion and commissioning of the roasting SCR denitrification project have enabled nitrogen oxide emissions to meet the emission standards of Class A enterprises, setting an example for the metallurgical industry in environmental governance and promoting the entire industry towards green and low-carbon development.

2. Complete Equipment System Ready for Production

TISCO Wanbang's production equipment is complete, covering the entire industry chain links, including the raw material system, roasting system, smelting system, utilities and auxiliary facilities, as well as the slag treatment metal recovery system. The equipment of each system is well-matched and operates stably. Compared with newly constructed projects, if reorganization investors acquire this equipment, they can save approximately 1-2 years of construction time, immediately commence production activities, and save significant time and capital costs. Taking the construction of a new ferrochrome production project of the same scale as an example, from project planning, land approval, equipment procurement and installation to commissioning and production, not only does it require substantial capital investment, but the construction period is long, and it faces numerous uncertainties. In contrast, TISCO Wanbang's existing equipment only requires necessary maintenance and optimization to quickly resume production and seize market opportunities.

3. Equipment Maintenance and Upgrading

Although TISCO Wanbang is preparing to enter pre-reorganization proceedings, each operation area still conducted systematic equipment maintenance in 2024. The roasting operation area, smelting operation area, etc., invested funds in maintenance cooperation, spare parts fees, production cooperation, etc., to ensure the normal operation of the equipment. Meanwhile, the company has formulated a technical upgrading plan for equipment and facilities, including the replacement of roasting furnace hydraulic motors, the relocation and transformation of submerged arc furnace coal gas blowers and pipelines, etc. These upgrades will further enhance equipment performance and production efficiency, strengthening the enterprise's competitiveness.

Possessing multiple patent technologies: TISCO Wanbang holds multiple patents in chrome ore pellet production and ferrochrome smelting, such as a production method for high-magnesium fluxed chrome ore pellets and a smelting method for refractory chromite. By optimizing batching and process parameters, these patents have improved the performance of chrome ore pellets and the recovery rate of chromium, reduced smelting power consumption, and enhanced production efficiency and economic benefits.

(2) Location Advantages

1. Cost Advantages in Chrome Ore Transportation

TISCO Wanbang is located in the Xiaohe Industrial Park, Jinzhong Development Zone, Shanxi Demonstration Zone, Jinzhong City, enjoying significant cost advantages in chrome ore transportation. China's chrome ore mainly relies on imports, with Tianjin Port being an important import port for chrome ore. Transporting chrome ore from Tianjin Port to Jinzhong, Shanxi, is closer and more convenient in terms of transportation routes compared to transporting it to Inner Mongolia and other major ferrochrome production areas. If railway transportation is adopted, the well-developed railway network in the Jinzhong area enables efficient cargo transfer, further reducing transportation costs. This cost advantage is not only reflected in the savings on daily transportation expenses but also, in the long run, can stabilize the supply price of raw materials and enhance the enterprise's ability to resist risks amid market fluctuations.

2. Cost Advantages in Ferrochrome Sales and Transportation

As a major domestic stainless steel producer, TISCO Stainless Steel has an annual demand for ferrochrome exceeding 2 million mt. TISCO Wanbang enjoys unique advantages in ferrochrome sales and transportation. The transportation cost of transporting ferrochrome from TISCO Wanbang to TISCO Stainless Steel is approximately 50 yuan/mt, while the transportation cost for producers in Inner Mongolia to transport to TISCO Stainless Steel is approximately 100-120 yuan/mt, giving TISCO Wanbang a cost advantage in transportation. This difference in transportation costs enables TISCO Wanbang to occupy an important position in TISCO Stainless Steel's supply chain, enabling it to supply ferrochrome more timely and efficiently to meet TISCO Stainless Steel's production needs, while also providing a stable market channel for its own product sales.

3. Industrial Agglomeration and Synergy Effects

Currently, a certain scale of industrial agglomeration effects has formed around the steel and ferroalloy industries in the Jinzhong area of Shanxi Province. Numerous upstream and downstream enterprises of ferrochrome, such as raw material suppliers and product processing enterprises, have gathered around TISCO Wanbang. Industrial synergy effects not only reduce the operating costs of enterprises but also enhance the competitiveness of the entire industry chain, providing a favorable industrial ecological environment for TISCO Wanbang's reorganization.

(3) Support from Local Government

1. Clear Supportive Attitude

The Management Committee of Jinzhong Development Zone, Shanxi Transformation and Comprehensive Reform Demonstration Zone, has a clear attitude towards TISCO Wanbang's reorganization. The local government is well aware of TISCO Wanbang's important position in the local economic development. Therefore, the government actively promotes the enterprise's reorganization, hoping to help the enterprise overcome difficulties by introducing reorganization investors, driving local tax revenue and employment growth. Relevant government departments have communicated with TISCO Wanbang and its creditors multiple times to coordinate and resolve issues encountered during the reorganization process, creating a favorable policy environment for the reorganization work.

2. Support in Infrastructure Construction

The Shanxi Transformation and Comprehensive Reform Demonstration Zone has provided strong support for TISCO Wanbang in terms of infrastructure construction. In terms of transportation, it continuously improves the regional highway and railway networks to ensure smooth transportation of chrome ore and ferrochrome products and reduce transportation costs. In terms of energy supply, it guarantees a stable supply of electricity, gas, and other energy sources required for enterprise production, avoiding production disruptions due to energy shortages. In addition, the government has also increased investment in public service facilities within the park, such as the construction and improvement of sewage treatment and garbage disposal facilities, providing a favorable production environment for enterprises, reducing their environmental protection investment costs, and enhancing their overall competitiveness.

III. Asset Situation of TISCO Wanbang

(1) Land Situation

TISCO Wanbang has acquired three plots of industrial land through assignment and has obtained the "State-owned Land Use Certificates," with a total land use area of 312,735.98㎡.

(2) Buildings and Machinery Equipment

TISCO Wanbang has constructed a total of 69,787.432㎡ of buildings on the ground. As of now, none of them have obtained property ownership certificates.

The main production facilities of TISCO Wanbang include a chrome ore fines pellet roasting production line with a production scale of 700,000 t/year; two 75MVA fully enclosed AC submerged arc furnaces with preheating vertical shafts, along with supporting facilities such as power supply and distribution facilities for the raw material yard, water supply and drainage facilities, ventilation and dust removal facilities, and slag metal recovery facilities. TISCO Wanbang currently has 879 sets of production machinery and equipment.

(3) Projects Under Construction

(4) Intellectual Property

TISCO Wanbang owns 22 patent technologies, with the specific details as follows:

IV. Registration Materials

Enterprises interested in becoming strategic investors are requested to submit registration materials and pay a deposit to the administrators. The registration materials are as follows:

1. Application for Intent to Participate in Reorganization Investment (in triplicate; if the investor is a corporate entity, it must be signed by the legal representative and stamped with the official seal, and the content should include the basic information of the investor, etc.);

2. A copy of the business license of the enterprise legal person and the identity certificate of the legal representative (stamped with the enterprise's official seal);

3. A copy of the ID card of the legal representative or person in charge; the original power of attorney and a copy of the ID card of the authorized person (the original shall be provided for verification during registration);

4. Credit certificates and proof of performance capability matching the scale of reorganization investment;

5. A confirmation letter for the legal document delivery address specifying the contact address, contact person, contact phone number, and email address of the intended investor;

6. Other relevant materials required to be submitted by the administrators subsequently.

V. Registration Method

1. Contacts: Attorney Li 15110369201;

Attorney Wu 13164918828;

Attorney Ma 18334781582

2. Contact Emails: 18958926670@163.com, mbf@huajulaw.com;

3. Registration Location: Room 1708, Tower T2, China Resources Building, Wanbailin District, Taiyuan City, Shanxi Province.

VI. Recruitment Notice

1. This project promotion book is compiled and issued by the administrators, and the right of interpretation belongs to the administrators.

2. The scope of reorganization assets is subject to the final investor recruitment announcement issued by the administrators.

3. The contents of this promotion book do not replace the due diligence of intended investors. When considering participating in the reorganization, intended investors should, in addition to referring to this promotion book, decide at their own discretion whether to hire professionals to conduct due diligence or issue investment opinions and be solely responsible for the results of the due diligence. Relevant investment risks shall be borne by the investors themselves.

4. This promotion book is not an offer document and does not have the binding effect of a reorganization investment agreement. It is only for reference purposes.

5. If intended investors are interested in reorganization investment and wish to learn more, they are welcome to negotiate.For specific and detailed information regarding the company's assets and liabilities, further inquiries can be made to the administrator after registration and the signing of a confidentiality agreement with the administrator.

Pre-reorganization Administrator of Shanxi TISCO Wanbang Furnace Charge Co., Ltd.

April 24, 2025