*ST Shenyang Reorganization Plan Approved By The Court: When Does General Technology 1 Billion 800 Million Win Its Former Glory?

*ST Shenyang (000410.SZ) reorganization plan has been settled.

On the evening of November 18th, *ST Shenyang announced that the Shenyang intermediate people's court ruled that the reorganization plan of the company, the controlling shareholder and the wholly owned subsidiary of the company was approved.

*ST Shen Shen said that according to the classification and adjustment plan of the company's reorganization plan, creditor's rights repayment plan, investor's rights and interests adjustment plan and operation plan, the company's liquidation of debts and other implementation of the reorganization plan will have a significant positive impact on the net assets of the company after the completion of the reorganization plan.

Affected by this, *ST Shen Shen opened its trading limit on November 19th.

"The reorganization plan has great positive significance for the company. The company has not been operating well and is insolvent. Through reorganization, the company will bring new opportunities for development." On November 19th, *ST Shen Ji, a related person, told the twenty-first Century business reporter.

In fact, since the court accepted the reorganization of Shen Shen and its parent company Shenyang machine tool (Group) creditors in July this year, the two companies have entered the judicial reorganization process. *ST Now, 4 months later, the reorganization bill came out.

Restructure landing

Although *ST Shenyang now has to go to reorganization, when it comes to the development of the company, we have to mention the dominance of *ST Shenyang's industry in the past.

Statistics show that Shen machinery group was reorganized by three machine tool enterprises in Shenyang in 1995. During the decades of development, Shenyang group has many brilliant moments. At the same time, there are also inherent constraints such as high debt leverage and institutional mechanisms.

Shen Shen was listed on *ST in 1996. With the change of the industry situation, the company lost its first loss in 2015, and the losses subsequently expanded in 2016. Although the performance in 2017 was reversed, the company suffered a loss in 2018, followed by a series of debt crises.

In recent years, the machine tool industry has been operating at a low level, and the trend of total market demand has declined. In the whole industry, there still exist structural contradictions between low and middle capacity overcapacity and the growth of middle and high-end demand. The competition among machine tool enterprises is becoming more and more intense, and many enterprises are in a dilemma of development. An analyst from a large brokerage firm in Beijing said.

Data show that in 2010, Shen Shen, *ST, achieved the highest net profit of the company since its listing, which was 142 million yuan, but since then, net profit has begun to shrink. In 2011, the company realized a net profit of 105 million yuan, and realized a net profit of 19 million yuan in 2013. Until 2015, *ST Shen Ji appeared the first loss and lost 638 million yuan.

Now, the Shenyang intermediate people's court approved the reorganization plan of Shen Shen, *ST. For this old machine tool enterprise, the turning point may have arrived.

According to the disclosure, general technology group will invest 1 billion 800 million yuan to complete the reorganization of Shenyang *ST, of which 700 million yuan will be invested by *ST Shenyang as a reorganization fund for two wholly owned subsidiaries, Yinfeng casting and excellent equipment, and the remaining funds will be used to repay debts and replenish mobile capital in accordance with the reorganization plan.

General technology group, founded in 1998, is a wholly state-owned company founded on the basis of four enterprises directly under the Ministry of foreign trade and economic cooperation, including China national technology import and Export Corporation, China Machinery Import and export (Group) Co., Ltd. Its main business includes advanced manufacturing and service consulting, medical and health care, trade and engineering contracting.

In fact, the market has long expected the general technology group to participate in *ST Shenyang reorganization. In January this year, General Technology Group signed a strategic reorganization of Shenyang group with the Shenyang municipal government. Then, in August 30th, general technology group submitted its application when *ST Shen Kai openly recruited strategic investors.

Before that, general technology group also reorganized another machine tool company in Liaoning Province, Dalian machine tool.

Future development needs to be tested

"Reorganization has made a good start for the company, and has changed from institutional mechanism to ownership structure, and we will wait and see how the company will develop in the future." In November 19th, a person close to Shenyang group told the economic report in twenty-first Century.

In the expectation of *ST Shenji, after the reorganization is completed, general technology group will help Shenyang to enhance its profitability through its own industrial advantages and resource advantages, as well as protect the rights and interests of creditors and workers.

It is understood that general technology group will become the largest shareholder of Shen Shen, *ST, and its shareholding ratio is expected to be 29.99%. In addition, the shareholding ratio of ordinary creditors is about 25%.

In addition, Shen Ji is concentrating on divestiture of assets that deviate from future business planning directions, accelerating the liquidation of assets that do not match, and divestiture assets through public disposal during the reorganization plan, and the realized funds will be used to pay reorganization fees, repay claims and supplement working capital in accordance with the reorganization plan.

In November 19th, Ali auction page showed that *ST Shen Ji's inventory, fixed assets and long-term equity investments will be auctioned on the judicial auction network platform of Taobao from 10 a.m. to 12 a.m. in November 24, 2019, with a starting price of 665 million yuan and a margin of 133 million yuan.

However, there is no details about the planning of general technology group.

"At present, only the reorganization plan has been signed, and the general technology group has not formally taken over the company, so there is no specific plan to disclose it." The *ST Shen Shen said.

"For the relevant issues of Shenyang group, the provincial government and the municipal government have given a series of policy support before the article is made from the institutional mechanism. This reorganization is a change in the ownership structure and will be improved. We are also observing." One institutional creditor told the twenty-first Century economic report.

"Before the government was a blood transfusion rescue, it provided many policies. This time, it also reorganized Shen Shen in accordance with the principle of marketization and rule by law. Through the adoption of the general technology group, the integration of the two companies' industrial chains is beneficial, and it is also necessary to properly integrate them in the current market economy. The aforementioned close to Shenyang group said.

From the performance of *ST Shen Ji in recent two years, the performance of annual loss has already been solved urgently.

This year's three quarterly data show that *ST Shen Shen's net profit from the beginning of the year to the end of the reporting period was 2 billion 555 million yuan, and its operating income was 944 million yuan, down 77.56% compared with the same period last year. Prior to that, last year, Shen Shen made a net loss of 788 million yuan in *ST.

Therefore, how to give full play to the synergy and improve the operation of the industrial chain after regrouping is very much concerned by the market.

After the implementation of the reorganization plan, the company's asset liability ratio is expected to be less than 40%. The assets deviated from the company's future business planning direction will be disposed of in this reorganization, and the production and operation pattern will be optimized, and the continuous profitability will be significantly enhanced. *ST Shen Ji pointed out.

"Similar to Shenyang" s high-end equipment manufacturing industry, the overall demand is different from other industries. For example, we say that the electronic information industry pays attention to economies of scale, and the larger the scale, the more potential the company has. For this equipment manufacturing industry, it depends on how to locate the location. If the positioning is high, it is mainly technology intensive, so the development of the company depends on future positioning and layout planning. The foregoing sources told the economic news reporters twenty-first Century.