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20th NOVEMBER 2020 UPDATE


Funds repayment

Following my earlier statement in July this year (see below), business has been returning to normal, however due to the various lock-down restrictions, Pamela was unable to return to China until late October. As a consequence, the continued remote management of the China business has created operational challenges.

Against this backdrop, I have been in regular contact with Pamela and, as a result, we have agreed a revised payment schedule for the outstanding debt, which takes account of the business’s cash flow and our requirement for a full settlement. Accordingly, the agreement which has now been reached and documented is as follows:

  • Funds to be received by 30th September 2020: £250,000
  • Funds to be received by 31st December 2020: £100,000
  • Funds to be received by 31st March 2021: £250,000
  • Funds to be received by 30th June 2021: £250,000
  • Funds to be received by 30th September 2021: £799,900

£250,000 was received by our lawyers in Singapore by 30th September and following the completion of the legal documentation, funds were released to us in late October which enabled a distribution to take place on 28th October of £225,000.

Given the above timings, I anticipate that a further distribution will be made in January 2021.

Accounts

On 3rd September, we completed our audited accounts, which in turn were filed at Companies House on 11th September. During the year, the Board decided to change our auditors to better reflect the requirements of the Company and to manage our costs and, accordingly, Wilkins Kennedy were appointed.



John McLean
Chairman
20th November 2020



1st JULY 2020 UPDATE


Funds repayment

Owing to coronavirus, volumes were down about 15% in the first 6 months. The operation in China is, however, slowly returning to normal, with production now nearly at full capacity. There is expected to be some pick up in sales volumes in the second half but this is uncertain given the secondary Covid-19 outbreaks. Against this backdrop, Pamela (CFC's China CEO) is reluctant to commit to releasing any funds until the operation stabilises and the outlook is clearer.

Pamela is still in Singapore (she has a Singaporean passport and has been unable to return to China) and anticipates that she will fly to China in late July, which will enable her to assess the operation for herself. In the interim, she is in the process of releasing some funds in Singapore which will enable a payment of £350,000 to be made to the Company by 30th September 2020.

Per our agreement, a further £1.3m is past due. On my recent call, Pamela and I discussed the payment of this remaining amount and agreed that, when I can return to China in the autumn, we will meet to agree a timetable for repayment.

Accounts

Earlier in the year we applied for and received a Covid-19 3 month extension for filing our accounts and are now in the process of completing the audited accounts, which will be available prior to 30th September 2020.



John McLean
Chairman
1st July 2020



25th FEBRUARY 2020 UPDATE


As loan-note holders are aware, the payment which we received in June was £450,000 below the agreed amount and after discussion with Pamela, (CFC's China CEO), it was agreed that the payment would be deferred to 31st December 2019. When I was in China in November, I met up with Pamela and the timing for the repayment was confirmed.

In December when I chased for a confirmation of the repayment date, Pamela said that she had met some unexpected business issues and needed to defer the payment until after Chinese New Year (CNY) (25th January 2020). Unfortunately, after CNY, the scale and impact of the coronavirus was starting to be felt which resulted in Pamela stating that she couldn't pay anything. After further discussion, she agreed to pay £100,000 (received with our lawyers in Singapore) and depending on the impact of virus, she can pay the balance of £350,000 on 30th June 2020.

To put the virus impact into context, Pamela's email to me stated:

The coronavirus is a disaster to China and till now almost all of China's provinces, cities, counties, villages, residential communities are in lock down. People are forced to not going out by local government and community committees and can only stay at home. There’s a huge danger of the virus spreading by people gathering and moving. Till now, most of factories and commercial movements have closed their doors, including us. We are facing an unprecedented test. I don't know the worse degree of China's society and economic in 1H 2020. But I can see that my business is facing a challenge to survive in 1H 2020.

Obviously, we need CFC in China to continue to trade as there is a further payment of £1.3 million due.

In the interim, once the funds are received in the UK, we will make a further distribution of £60,000, after taking account of audit fees, contingency and other costs.

This is far from ideal, however at this stage I believe we must be supportive of Pamela.



John McLean
Chairman
25th February 2020



12th APRIL 2019 UPDATE


COMPANIES HOUSE


I am pleased to report that after extensive correspondence and appeals, we have been successful in our endeavours with Companies House concerning the penalty fines for our late accounts. As a result, the £45,000 fine has been withdrawn and as a consequence the Company will now make a further distribution of £50,000 in April.

In achieving this result, I would particularly like to thank my board colleague, Clifford Halvorsen for his hard work and detailed appeal drafting, as without him, the Company would have had to incur a significant amount of legal time at a substantial cost.



John McLean
Chairman
12th April 2019



4th MARCH 2019 UPDATE


Following my earlier update ( 17th December 2018), Pamela contacted us in February to state that trading was difficult and that she was unable to remit the outstanding balance of £1,250,000. She did however agree to remit £800,000 which was received last week. Accordingly, taking into account the December receipt, we have received £1,050,000 and after discussion with the principal a loan- note holders, a distribution of £900,000 will be made this week.

The outstanding balance of £450,000 is due to be paid by 31st December 2019, the exact timing of which is still to be agreed with Pamela.



John McLean
Chairman
4th March 2019



17th DECEMBER 2018 UPDATE


In early December, Pamela (Feng Bo) contacted the Company to request a deferment of the payment schedule for the £1,500,000 which was due to be paid by 31st December 2018. Following discussions both with her and the principal loan-note holders, agreement was reached whereby the payment date would be extended to 5th February 2019, conditional on £250,000 being paid to the Company by 21st December 2018 as a part payment of the amount due. A telegraphic transfer for £250,000 was made by Pamela on 17th December 2018.

Based on the above and the receipt of £1,250,000, it is our intention to make a further distribution to loan-note holders in February 2019.



John McLean
Chairman
17th December 2018