On August 3, 2021, Guangdong Petrochemical, Henan Yonghui and Ji Guang signed a guarantee contract with the Agricultural Bank of China, and Guangdong Petrochemical, Henan Yonghui and Ji Guang agreed to provide guarantees to the Agricultural Bank of China as a guarantee for the loan repayment obligation granted by the Agricultural Bank of China to Jiangmen Xinjiang Gas (a 50% joint control entity of a company).
The announcement said that because Jiangmen Xinjiang Gas obtained a loan from the Agricultural Bank of China, the purpose was to meet the needs of daily operating funds. The loan will provide Jiangmen Xinjiang Gas with stable low cost and sufficient financial support to promote its business development; Effectively reduce access to funds from shareholders; Improve the efficiency of shareholder capital turnover; Increase your return on investment. Based on the above reasons, the Directors are of the view that the warranty and the terms of the guarantee contract are in line with the Group's overall business strategy and long-term interests.
![Referring to financing guarantees for three consecutive months, the SASAC has drawn a red line for central enterprises: the total guarantee scale does not exceed 40% of the group's total assets.[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)