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Questioned Whether The City Can Acquire Large Shareholder Assets.

2011/10/9 14:34:00 32

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After nearly three months' suspension,

Textile City

(600790) to resume trading and issue a major asset reorganization plan, and to acquire the major shareholder of China Light Textile City Development and Operation Co., Ltd. (hereinafter referred to as "development company") through non-public offering shares and cash.

Some investors questioned the assets of the acquisition: "how does the assets with only 2 million 60 thousand profits value more than 600 million?"

"Quality" assets need future

"The development company decided to pour some of the better quality market assets into the Textile City, reduce competition among the same industry, improve the scale of operation of the listed companies and enhance the capacity for sustainable development," Textile City said in a notice.

The assets of the acquisition and development company in light textile city include Dongsheng Road market and North Alliance market assets and the corresponding advance rent, margin and so on.

The estimated value of the acquisition is 2 billion 230 million yuan.

It is worth noting that the valuation of Dongsheng Road, one of the "high quality" assets, has reached 620 million yuan.

Data show that Dongsheng Road market began trial operation in October 2008, is now in normal business condition, from 2009 to 2010, it is at a loss, the loss amount is 12 million 240 thousand yuan, 1 million 190 thousand yuan respectively.

Operating profit in the first half of this year was 884 thousand and 100 yuan.

While the other assets of the North Alliance market is not yet completed, it is estimated that it will only be available at the end of September 2011. The estimated value is 1 billion 610 million yuan, which is 14.43% higher than the book value.

"Dongsheng Road market main assets include

Business room

And parking spaces are just a few properties, and the profitability is not outstanding. Why should we buy it at a price of 600 million yuan? "Mr. Wan, a Wenzhou investor, called our company's news hotline.

In this regard, Zhang Weifu, chairman of the Textile City, said in an interview with "popular Securities Daily" yesterday: "Dongsheng Road market is in the initial stage of operation two years ago. Losses are inevitable. But we can see that this year has begun to be on the right track, and we must pay more attention to the future benefits.

As for the North Alliance market, both the geographical location and the way of leasing have their unique advantages. According to our market survey, long-term prosperity can be expected.

Only 80 days after the suspension?

Zhang Weifu told reporters: "this reorganization we know is also very suddenly, 3 afternoon receives the announcement to announce the suspension at night."

On the evening of July 3rd, light textile city issued a notice of suspension, saying that the development company was planning to suspend its business starting from now on.

There is a lot of discussion in the market. During the period, it was rumoured that the development company had to inject assets into the Textile City, but it has not been confirmed.

Until the resumption of the week before September 23rd, the announcement of the textile city announced that the reorganization was for the company to purchase some market assets held by the development company in the form of non-public offering shares and cash payment, and was submitted to the board of directors for consideration in September 26th.

However, on the day of resumption, investors found that the value of the assets involved in the reorganization was only valued by the company itself. Meanwhile, the company said: "at present, the audit and evaluation work is still in progress, and the above disclosure data are all estimated by the management level."

"Why more than 80 days?"

Suspension

Just out of a plan? Why is the assessment report so long that it hasn't come out yet? "Mr. Wan questioned.

Zhang Weifu said that because of the North Alliance market investment plan is not the same as before, in addition to part of the priority investment, all the use of competitive rental.

The results of the investment plan directly affect the evaluation value and profit forecast value, and the investment results may not come out until the end of the year.

Winners in restructuring

The non-public offering of light textile city is ready to issue 1 billion 476 million yuan shares to the development company. The issue price is 8.01 yuan / share. The difference is paid by the rentals city in advance rent paid by the development company for the injection of assets investment. It is estimated that the pre paid rent will be enough to pay the cash consideration, for example, if the advance receipts are insufficient, the company will solve it by itself.

Some analysts pointed out that the non-public offering shares will be seriously diluted basic earnings per share.

The net profit of light textile city in the first half of 2011 was 58 million 742 thousand and 300 yuan, net profit after deducting non recurring gains and losses was 48 million 161 thousand and 600 yuan, and the basic earnings per share were 0.09 yuan.

After the merger of the Dongsheng Road market, which is estimated to be 620 million yuan and the total profit will be 2 million 64 thousand and 100 yuan, the basic earnings per share will be diluted.

"Only large shareholders benefit during this period."

Mr. Wan told reporters.

The plan shows that after the completion of the paction, the total share capital of the textile city will increase from 619 million to 803 million shares, while the development company will inject the assets that are not outstanding at present to the listed companies, resulting in the shareholding ratio of the listed companies from 15.64% to 35%, which greatly improves the control of the company.

"I think the asset portfolio injected by major shareholders is the best."

Zhang Weifu said.

However, the market did not buy it. The resumption of trading continued to decline for three days, and it closed at 6.82 yuan on Friday, down 16% from 8.1 yuan before the suspension.