Investor Presentaiton
Recovery
Value
.
•
If IsZo cannot resolve the liquidity crisis with the lending banks, and in the worst-case
scenario, the Company would face liquidation.
⚫ The liquidation value would be adversely impacted by substantial tax liabilities
triggered by the sale of properties.
.
In the PRC, major tax items include*:
✓ value-added taxes on sales proceeds (after deductible amount) estimated to be
approximately 10%**;
✓ land appreciation tax levied on gains at a progressive rate from 30% to 60%; and
✓ corporate income tax levied at a standard rate of 25%.
• The management estimates that the aggregate tax rate would be approximately
30-40% of the sales consideration.
• In the event of a forced liquidation, at fire-sale prices, project values would be
substantially lower, destroying significant shareholder value.
⚫ The highest priority for Nam Tai management is to resolve the liquidity crisis,
resume normal course operations and execute our strategic plan.
Notes:
* The taxation is a complicated matter and varies considerably with the transaction structure. The relevant discussion is provided for reference only.
** Nam Tai Inno Valley and Wuxi Facilities would be eligible to the value-added tax rate for products prior to 2016, which is approximately 5.6%
INVESTOR PRESENTATION
36
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