The Difficult And Tortuous Course Of Textile Reorganization In Tianshan

In the past year, under the guidance of the Xinjiang government, how did Katie invest and participate in the pformation of the listed companies that had been struggling with the development of Xinjiang's high-quality mining resources? What kind of hardships did they experience during this period?

"Tianshan textile (000813) shareholders' meeting has considered and approved the company's issue of shares to buy assets.

The next thing we need to do is to report the reorganization plan to the SFC, which means that the restructuring of Tianshan textile industry is taking a big step forward. Zhang Qiang, director and deputy general manager of Xinjiang Tianshan textile Investment Co., Ltd., Katie, told reporters at yesterday's shareholders meeting of Tianshan textile.

"The Tianshan textile reorganization started in July 31st last year is divided into two stages. The first stage is Katie's controlling right to invest in Tianshan textile.

The agreement includes the pferable shares of Hongkong Tianshan and other companies and the pfer of state-owned shares through administrative pfer.

At present, Katie has completed all the equity pfer procedures and owns 56.78% of Tianshan textile and has become the absolute controlling shareholder.

Zhang Qiang said, "next, what we have to do is to buy shares of the west mining industry, and install the copper mine into Tianshan textile, and complete the directional issuance of Tianshan textile."

In the loess slope of Hami, 500 kilometers away from Urumqi, about 200 people risked the construction of Gobi hot summer stress of 50 degrees C, with a view to completing the construction of the Loess Slope copper zinc mine in Xi Tuo mining.

According to the reorganization plan of Tianshan textile, the copper deposit will be injected into Tianshan textile. After 2012, it will become the main profit growth point of Tianshan textile.

The issue of shares to buy 75% stake in Xi Tuo mining is the core content of Tianshan textile reorganization, and disputes surrounding Xi Tuo mining holding rights are very tortuous.

In February 2005, the Xinjiang Hua Lu mineral company, a Chinese Australian who paid the civil code, applied to the Ministry of land and resources in accordance with the law to obtain the "73.29 square km copper zinc polymetallic deposit risk prospecting right" in the loess slope of Hami, Xinjiang.

In November 2006, Fu Min Lu introduced the venture prospector Wang Jingyu to join in the exploration and raise funds for relay exploration. After the continuation of the exploration, all of the investment made by Wang Jingyu will enjoy 50% risk exploration rights.

In November 2007, a breakthrough was discovered in prospecting. In order to make preparations for further exploration and exploitation, the two Fu Minlu and Wang Jingyu submitted their approval to the Ministry of land and resources in accordance with the law, and removed the right of prospecting for the loess slope from the Xinjiang cooperation company of the two sides, and pferred to the limited company established by the two sides of the Xinjiang west mining industry, and then increased investment in exploration. Finally, in 2009, the discovery was made today.

Reporters learned from various sources that Fu Min Lu was an experienced expert in geological prospecting.

In 2005, before the declaration of prospecting rights in the above-mentioned area in Xinjiang Hua Lu mining industry, the land and resources department approved the Hami loess slope area as the "prospecting right blank area", so the acquisition of prospecting rights in the area did not need to pay the prospecting rights.

Through the geological information obtained by years of arduous exploration, Fu Min Lu and Wang Jingyu firmly believed that there is possibility of finding large and medium metal deposits in the area.

They organized dozens of experts and geologists at home and abroad, invested a lot of money, overcame many difficulties, and carried out risk exploration in unremitting efforts for five years, and finally got more detailed 1 kinds of metal reserves.

Wang Jingyu's Lawyer Wang told reporters: "in fact, Fu Wang cooperation soon found a vein, but it is not yet able to accurately explain reserves with comprehensive and detailed exploration data, and it is not publicly available.

At this stage, Fu and Wang continue to increase investment in venture exploration funds and speed up exploration, but in the end, the outside world still knows.

Immediately, many large Chinese and foreign companies, including well-known domestic mining enterprises, came to ask for cooperation.

In the process of negotiations and hesitation, Katie invested in a prudent and professional way to appoint a team of geological and mineral experts to conduct a detailed investigation of the loess slope area before launching a business negotiation with us.

We believe that Katie's investment is a local state owned enterprise in Xinjiang. Its steady and heavy working style will bring more convenience to the subsequent exploration and mining work. The copper mine was discovered in Xinjiang. It is more confident to give the ore to the Xinjiang government's leading mining, and Katie's investment promised us to retain 50% of the shares, which is in line with our wishes.

In particular, the design of Xi Tuo mining will be listed on its own in the future, leaving us a great imagination for our future cooperation.

Although the two sides have made clear the intention of cooperation, the negotiation process is difficult and tortuous. Both sides are based on the future development of enterprises and negotiate the purchase price in accordance with the principle of marketization.

In July 2009, Katie's investment in Katie mining started the acquisition of the west mining industry. The two sides signed the supplemental agreement in November, and finally decided to buy 25% of the shares of Qinghai's snow chi (Wang Jingyu one company) and Fu Minlu's west mining industry for 306 million 500 thousand yuan, together with the 50% share of the west mining industry.

At the same time, the new and old shareholders jointly made two capital increases to the west mining industry, so that the registered capital of the west mining industry reached more than 200 million yuan.

Zhang Qiang said: "Katie's acquisition of the west mining industry is based on the approval of the SASAC, through geological experts to repeatedly check the early exploration workload of the mine, conduct a careful re examination of the comprehensive geological results such as geological reports and mineral samples, and make a repeated calculation of the mineral resources, so as to obtain a pure market behavior at the base price of the market without any loss of state assets.

With the support and guidance of the leading group of the property rights, the state owned assets supervision and Administration Commission and the financial office of the autonomous region, the reorganization has been carried out in an orderly manner.

During the restructuring process, intermediaries such as brokerages, lawyers and other intermediaries made a lot of in-depth verification of the assets to be taken, which verifies the rationality of the acquisition.

Wang said: "Fu Minlu and Qinghai Xue Chi's 306 million 500 thousand yuan equity pfer fund, 106 million 500 thousand yuan has been invested in the West extension company through the way of capital increase, and is used for mining construction.

Fu Minlu and Qinghai Xue Chi actually get only 200 million yuan, less than half of other acquiring company's offer.

And this part of the fund is used to compensate for the original 70 million yuan original shareholders' risk exploration investment, and the other part is used to compensate the risk exploration investment that is not recognized by the new shareholders but does happen.

If it is not confidence in the future development of the west mining industry, it is impossible to make such a decision.

Tianshan textile was awarded the west mining industry.

"The potential of increasing resources in the west mining industry is huge, and its own value-added has been a foregone conclusion."

This is the most widely heard comment in the interview.

At present, Xi Tuo mining has 73.41 square kilometers of prospecting rights and is divided into six mining areas.

In the second half of 2009, a great breakthrough was made in prospecting risk at the 2 square kilometers of the first section of the Loess Slope in the prospecting area. According to geological work, the total value of copper, zinc, gold and silver resources in the multiple ore belts in this area was converted to copper resources of 314 thousand tons.

In January this year, Xi Tuo mining applied for and obtained the 2.021 square kilometers of mining rights in the Loess Slope prospecting area issued by the land and Resources Department of the Xinjiang autonomous region. According to the law, the assessment value of mining right in the first mining section is about 765 million yuan, and the 100% stake in Xi Tuo mining is estimated at 928 million yuan.

Hong Tao, general manager of Hongyuan securities and Acquisition Department, is generally concerned about the mining rights of the west mining industry. He said: "the west slope mining company and its wholly owned subsidiary, Huang Po mining, have obtained various certificates and approval documents at this stage. The proposed mining assets have been obtained by the Ministry of land and resources issued by the Ministry of land and resources and the mining warrants issued by the land and Resources Department of the Xinjiang autonomous region, and approved by the Ministry of land and resources.

It should be said that the work of the agencies is still solid.

After the completion of the acquisition of the west mining industry, with the support of the Xinjiang government, Katie mining, a subsidiary of Katie investment, decided to put the assets of Xi Tuo mining into Tianshan textile, improve the quality of its assets and enhance its profitability.

Putting the west mining industry into Tianshan textile means that Xi Tuo mining has abandoned the opportunity of independent listing in the future, resulting in some loss of rights and interests.

In response, Zhang Qiang, deputy general manager of Katie investment, said: "we must take the overall situation into consideration.

From the perspective of resolving the risks of Tianshan textile and maintaining social stability, the government of the autonomous region requires that the wool textile industry should not quit, and that workers should not be laid off.

The assets to be restructured in the reorganization plan should have higher profitability to support the future performance of listed companies and ensure the stable development of listed companies.

If we simply put our shareholding subsidiary Katie mining holding 50% of Xi Tuo mining company into the listed company, Tianshan textile can not form an absolute control of the west mining industry, and can not guarantee the interests of listed companies.

However, the representatives of Fu Min Lu and Qinghai Xue Chi were shocked and asked not to participate in the reorganization, or even to restore the status quo.

Katie, a lawyer in Qinghai, said: "the investment was suddenly announced to us to reorganize the textile with Tianshan textile, and it called for an amendment to the agreement on" self listing "in the previous agreement, and told us that the reorganization of Tianshan textile has been irreversible under the guidance of the government. We have agreed on the idea of taking the overall situation into consideration after many consultations and communication, fully understanding the significance of the reorganization of the autonomous region.

Due to the fact that they are Australian Chinese, they are unable to take part in the reorganization according to relevant laws and regulations, and their shares have not been listed as the underlying assets of listed companies.

In March 2010, Xi Tuo mining shareholders' resolution approved Katie mining and Qinghai Xue chi to subscribe Tianshan textile shares to shareholders of the Tiantao textile company.

In June 17th, Katie mining, Qinghai snow Chi and Tianshan textile signed the agreement on the issue of shares to buy assets.

In June 18th, Tianshan textile announced a major asset restructuring report (Draft), which is to be issued to Katie mining and Qinghai snow express 120 million shares in accordance with the price of 5.66 yuan / share. It intends to purchase 75% stake in Xinjiang Mining Investment Corporation of Xinjiang and Qinghai snow technology limited company.

In August 2nd, Tianshan textile shareholders' meeting passed the report on the purchase of assets and related pactions (Draft) by issuing shares.

Additional performance commitments in restructuring

In June 18th, when Tianshan textile resumed, it was the central government's policy of vigorously supporting Xinjiang's great development and development.

The stock price trend after Tianshan textile resumption shows that investors have strong expectations and expectations for the future development of Tianshan textile.

This confidence and expectation also come from the special commitment of the reorganizing party to the listed companies in the reorganization plan.

In order to ensure the income of Tianshan textile in 2010, 2011 and 2012, Katie mining made additional commitments to Tianshan Textile: ensure that Tianshan textile does not lose money in 2010, net profit in 2011 is not less than 10 million yuan, and net profit in 2012 is not less than 20 million yuan. If the above profit target is not achieved, the deficiency will be replenished in cash, so as to fully protect the interests of listed companies and minority shareholders.

Katie mining has net assets of 496 million yuan as of December 31, 2009, and has the ability to fulfill its commitments.

As for profit commitments, Zhang Qiang, deputy general manager of Katie investment, said: "as of December 31, 2009, Katie mining has a net assets of 496 million yuan. Although the abundant liquidity assets of Katie mining industry can fully guarantee the performance commitments, we can see from our point of view that the success of this reorganization is another unavoidable challenge faced by Katie. The premise of this challenge is that we must overcome many difficulties and build the Hami loess copper and zinc mine as soon as possible, while operating Tianshan textile."

At yesterday's shareholders' meeting, Tianshan textile and Katie mining and Qinghai snow Chi signed a "profit compensation agreement".

The reporter noted that this Agreement specifically agreed: after the completion of the reorganization, if the accumulated actual profit of the first section of Hami loess slope in 2010 to 2014 is lower than the cumulative profit forecast in the assessment report, Katie mining and Qinghai snow express undertake the performance compensation of Tianshan textile separately in the form of shares.

To this end, Wang lawyer explained: "Xi Tuo mining, such as the accumulated profit of less than 257 million 991 thousand and 900 yuan in five years from 2010 to 2014, will face the risk that Qinghai's own share will be redeemed and cancelled by a listed company at a price of 1 yuan. Under the extreme circumstances, even all the shares will be redeemed by the listed company at a price of 1 yuan.

Moreover, Qinghai's snow industry and Katie's mining industry will undergo a lockup period of nearly five years if the reorganization is completed in 2010.

Therefore, we do not agree with the market risk of Qinghai's snow market, but we must cooperate with the overall situation.

In the Katie mining and Qinghai snow lock's lock up period and profit compensation plan formulation, Hong Tao, general manager of Hongyuan Securities Acquisition Department, said: "according to the rules, taking into account the time of the audit, the new lock of Qinghai's new stock may be only one year, and the Katie mining new stock lock up period can only be three years.

Because Xi Tuo mining can only be put into production in 2012, and the profit period for three years after the commissioning is from 2012 to 2014. Then we will calculate the time interval of profit compensation from 2010 to 2014. Finally, this profit compensation final point will be determined as the disclosure date of the annual report of the listed companies in 2014.

The scheme lengthened the profit compensation period, and at the same time, all new shareholders' lock up period was the earliest and ended in the first half of 2015.

Combined with the additional performance commitment of Katie mining industry to Tianshan textile, it should be said that, on the basis of full demonstration, this major asset reorganization plan not only ensures the construction and operation of the assets, fully protects the interests of small and medium shareholders, but is more conducive to the long-term development of the listed companies.

The pformation of Tianshan textile resources has been steadily advancing under the cooperation of the government of Xinjiang and the cooperation of all the shareholders. Wang Huimin, the assistant chairman of the regional government's financial work and the director of the financial affairs office of the Xinjiang autonomous region, firmly held that the restructuring of Tianshan textile industry has made a table rate for some of the Xinjiang's listed companies whose position is not clear and their advantages are not outstanding. These companies should make active use of the special resources of Xinjiang, reexamine and formulate strategies that conform to the development of the enterprises, seize the opportunity of the great development and great development of Xinjiang, increase the resources acquisition, and timely carry out the main business pformation and industrial structure adjustment.