Litigation amount exceeds 4 billion yuan, pending performance exceeds 7.7 billion yuan! Once an environmental protection giant mired in litigation quagmire, last year's maximum loss forecast reached 3.5 billion yuan, negative net assets may face "*ST" treatment

Reporter | Peng Fei

Editor | Jin Mingyu, Huang Sheng, Du Bo | Proofreading | Zhang Jinhe

Once a giant in the environmental sector, Enlighten Environment (SZ000826, stock price 2.38 yuan, market value 3.392 billion yuan) is facing its darkest hour.

On the evening of March 12, Enlighten Environment announced that, as of now, the company and its controlling subsidiaries have a total of 4.088 billion yuan in ongoing lawsuits and arbitration cases, accounting for 170.20% of the company’s most recent audited net assets. Additionally, the amount of previously adjudicated or settled but unpaid claims has reached 7.737 billion yuan.

More critically, according to the earnings forecast, Enlighten Environment expects a net loss of 2.2 to 2.7 billion yuan after excluding non-recurring gains and losses for 2025. The company’s end-of-year net assets attributable to the parent could fall below zero, with a projected negative range of -2.075 to -2.775 billion yuan. If the final audit confirms negative net assets, the company’s stock will be officially flagged with delisting risk warning (*ST) after the 2025 annual report is disclosed.

The “Daily Economic News” reporter notes that, faced with multiple “minefields” such as auctioned controlling equity, frozen bank deposits, and overdue debts, Enlighten Environment is attempting to resolve its liquidity crisis through vigorous collection of accounts receivable and asset disposals.

In this battle of legal claims and heavy debt pressure, whether Enlighten Environment can successfully turn the tide remains a focus of the capital market.

Deepening Litigation Quagmire:

Unresolved Cases Exceed 4 Billion Yuan

The litigation storm facing Enlighten Environment is intensifying.

On the evening of March 12, the company issued an announcement titled “Progress of Litigation (Arbitration) Cases,” which shows that, to date, the company and its controlling subsidiaries have a total of 543 million yuan in unresolved cases related to administrative lawsuits, construction disputes, and other operational matters; meanwhile, due to disputes over construction contracts, creditor-debtor lawsuits, and other issues, the company and its subsidiaries are defendants in unresolved cases totaling 3.545 billion yuan.

Combined, the total amount involved in lawsuits and arbitration cases against the company and its subsidiaries has reached 4.088 billion yuan, representing 170.20% of the company’s most recent audited net assets.

Furthermore, Enlighten Environment’s announcement indicates that some previously involved cases where the company and related subsidiaries were defendants have reached judgments or settlements. As of now, the total amount of pending enforcement in these cases is approximately 7.737 billion yuan.

The “Daily Economic News” reporter observes that these massive legal cases are not just on paper; many have entered the stage of substantive enforcement, directly impacting the company’s liquidity.

For example, in a case heard by the Beijing First Intermediate People’s Court, plaintiff Enlighten Technology Service Co., Ltd. vs. defendant Enlighten Environment over a loan contract dispute, the court ordered Enlighten Environment to repay approximately 230 million yuan in principal and interest by December 15, 2025, and to bear subsequent high interest and court costs.

In a February announcement, the company mentioned that due to the application for enforcement by Hunan Jinsha Road and Bridge Construction Co., Ltd., the Intermediate People’s Court of Xianyang, Shaanxi Province, froze and allocated bank deposits of Xingping Hongyuan Development Construction Co., Ltd. and Enlighten Environment totaling 520 million yuan, or may seize, deduct, or auction their income or assets of equivalent value. This involved amount is about 495 million yuan, accounting for 10.54% of the company’s net assets at the end of last year.

Additionally, the core subsidiary’s equity has been subject to seizure and valuation. On February 10, the announcement showed that the Intermediate People’s Court of Jinan, Shandong Province, froze 6.95 million yuan worth of equity in Hengyang Sande Kaitan Renewable Resources Technology Co., Ltd., held by Enlighten Environment, in a dispute over a construction contract, and further requested valuation and auction of this equity.

Meanwhile, multiple cases involving Enlighten Environment are being escalated or reinstated for enforcement: a loan dispute involving Chang’an Bank Xi’an Yanliang Branch (amounting to over 767 million yuan, or 16.32% of last year’s net assets) has been resumed by the Xi’an Intermediate People’s Court; a construction dispute involving Shaanxi Wanyue Industrial Co., Ltd. has been transferred from Yanliang District Court to the Xi’an Intermediate People’s Court for enforcement.

These frequent lawsuits and enforcement actions highlight the severe external debt collection pressures facing Enlighten Environment.

Projected Losses Up to 3.5 Billion Yuan

Negative Net Assets Trigger Delisting Warning

The heavy legal burdens have directly undermined Enlighten Environment’s financial fundamentals.

According to the company’s performance forecast disclosed at the end of January, preliminary estimates suggest that the net profit attributable to shareholders in 2025 will suffer a loss of 2.8 to 3.5 billion yuan; after excluding non-recurring gains and losses, the net loss is expected to be between 2.2 and 2.7 billion yuan.

This massive loss could cause the company’s net assets attributable to the parent at year-end 2025 to be negative, with an estimated range of -2.075 to -2.775 billion yuan. The company issued a risk warning in the announcement, stating that if the audited net assets attributable to the parent are negative at the end of 2025, the stock may be subject to delisting risk warning (*ST) after the annual report is disclosed.

The reasons for such a large projected loss include: significant investment losses due to judicial auction of some controlling subsidiaries’ equity; continued growth of receivables leading to large impairment losses; incomplete settlement of transferred assets and underperformance of some projects resulting in asset impairment; overall debt pressure, overdue debts, heavy financial costs, and penalties such as interest and breach fees.

Regarding the current situation, Enlighten Environment’s management is not indifferent. In the March 12 evening announcement, the company stated that, given the large overall litigation amount and the fact that some cases are entering enforcement stages, the company is actively working to resolve litigation and enforcement risks, communicating with relevant parties to reach a prompt and proper resolution.

However, with nearly 7.7 billion yuan in pending enforcement judgments and 4 billion yuan in unresolved lawsuits, whether routine collection efforts and partial asset disposals can turn the tide, fill the funding gap, and prevent the company from delisting remains highly uncertain.

｜Daily Economic News  nbdnews  Original Article｜

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