Dalian Friendship Once Again Changed To Wuhan'S 360 Million Yuan.

Prior to the transfer of the controlling shareholder's right to borrow money, the Dalian friendship once again welcomed the replacement of the controlling shareholder.

In January 9th, the Dalian friendship announced that the Limited by Share Ltd (hereinafter referred to as "Wu Xin Investment Holdings") signed the investment agreement on the transfer of shares of Dalian friendship group (Shenzhen) Limited by Share Ltd and Wuhan development and Investment Co., Ltd. in January 8, 2020 with Wuhan (Shenzhen) investment Holdings (hereinafter referred to as "Wu Xin Investment Holdings"). Wu Xin Investment Holdings transferred 100 million shares of its company (28.06% of the total stock) to 3.60 yuan / share in Wuhan, and the total transfer price was 360 million yuan.

Affected by this, Dalian friendship opened in January 9th, that is, the daily limit was 4.31 yuan / share.

After the completion of the transfer, the controlling shareholder of Dalian friendship was changed from Wu Xin investment holding to Wuhan open investment. The actual controller was changed from Chen Zhixiang to the state-owned assets supervision and Administration Commission of Wuhan Municipal People's Government (hereinafter referred to as Wuhan SASAC).

It is worth noting that the price of equity transfer was about 70 percent off yuan at the price of 13 yuan per share when compared with the shares of the friendship group transfered by Wu Xin Investment Holdings in 2016. "The first transaction occurred in 2016, and after 3 years, the situation of depreciation is possible." In January 9th, Dong Dengxin, director of the financial and Securities Research Institute of Wuhan University of Science and Technology, told an economic reporter in twenty-first Century that whether there was a loss of state assets needed to analyze the business data of the transaction targets and whether there were any mistakes in the transaction process.

Wuhan opens investment

In the distribution of state-owned assets in Wuhan, the proportion of financial services was not high. As a result, the previous investment of Wu Xin Investment Holdings was once interpreted by the market as Wuhan's state assets, and the credit guarantee assets will be injected into the listed companies.

Dalian friendship was listed in 1997. Its main businesses include retail department stores, hotel management and real estate development. Since Wu Xin Investment Holdings took the lead in 2016, the Dalian friendship business structure has not changed materially. Commercial retail is still the main revenue component. According to the semi annual report in 2019, its commercial retail business income was 364 million yuan, accounting for 87.24% of the main business revenue.

The opening of Wuhan's investment may mean that Wuhan's state-owned assets have changed the way of reform.

"At present, there are two main ideas for the reform of state owned assets in Wuhan, one is infrastructure construction, public goods, the other is strategic emerging industries, and the expansion of state owned enterprises is conducive to revitalize Wuhan's economy." Qin Zunwen, director of the Hubei Provincial People's Government Advisory Committee and the provincial "one belt and one road" Research Institute, told reporters that city investment, subway, aviation, finance and high-tech industries are also new areas of state capital involvement.

Public information shows that Wuhan's main business includes energy, environmental protection, new and high technology, urban infrastructure, real estate, ecological agriculture, business and tourism investment business, which is highly compatible with the direction of Wuhan SASAC reform. This also opens the door for Dalian friendship's future development. Financial data show that as of the end of 2018, the total assets of Wuhan's open investment amounted to 41 billion 800 million yuan, and the owner's equity attributable to shareholders of the parent company was 9 billion 860 million yuan. In 2016 -2018, the operating income of Wuhan was 2 billion 460 million yuan, 2 billion 870 million yuan and 3 billion 80 million yuan respectively, with net profit of 46 million yuan, 162 million yuan and 102 million yuan respectively.

Wuhan Kai Kai also said that there was no plan to change the main business of Listed Companies in the next 12 months, which led to a fundamental change in the main business of listed companies. However, from the perspective of enhancing the sustainable development ability and profitability of listed companies, we did not rule out that in the next 12 months, we would try to plan for the sale, merger, joint venture or cooperation with other companies and assets of their listed companies or their subsidiaries, or to promote the reorganization plan of listed companies to purchase or replace assets.

From the perspective of ownership control relations, Dalian friendship has been promoted in the whole state owned assets system of Wuhan. According to the above announcement, Wu Xin Investment Group holds 40% of Wuhan Xin Investment Holdings, and Wuhan open investment is the controlling shareholder of Wu Xin Investment Group, with a shareholding ratio of 92.28%.

Previous transaction litigation

On the other hand, Dalian friendship's former controlling shareholder friendship group and Wu Xin investment holding transaction are still in the litigation process. Up to now, Kai Sheng Trading, Wu Xin Investment Group and Wu Xin Investment Holdings have only paid 1 billion 664 million yuan trading consideration to the friendship group of Dalian friendship former controlling shareholder, and 1 billion 136 million yuan transaction price has not yet been paid.

According to the previous transaction announcement, the cash consideration paid to friendship group was 600 million yuan, the amount of assets to be set aside for debt was 700 million yuan, and another 1 billion 500 million yuan was used as the transfer price for friendship group to sell the proposed assets, which is commonly known as the "backdoor fee". At the same time, it also agreed that after the completion of the transfer of shares, the investment bank of Dalian and Kai Sheng would facilitate the Dalian friendship to transfer the assets and corresponding liabilities and business of the commercial and hotel assets owned by the friendship to the friendship group.

On the basis of this, the friendship group asked the court to order Kay Sang Trading and Wuhan credit investment group to share the transfer transaction with the friendship group to the total price of 1 billion 136 million yuan, and the corresponding late fee.

The litigation of share transactions between the former controlling shareholder and the former controlling shareholder will also affect the process of the transaction. According to the equity transfer process, the transfer of shares is still subject to the approval of the relevant government departments such as the Wuhan Municipal People's government's state-owned assets supervision and Administration Commission, and through the compliance examination of the Shenzhen stock exchange, they can handle the registration of shares transfer at the China Securities Depository and clearing Co., Ltd. Shenzhen branch.

Dalian friendship also said that the above litigation or the stock that will lead to the transaction can not be registered, or the registration time is later than expected.

However, Dong Dengxin said, "if the price of the previous transaction is not paid, it is only a simple economic dispute. Maybe it can be divided into two parts."