Investment risk alarm sounded!
On the evening of February 7, Fujian Start Group Co.Ltd(600734) disclosed the announcement on the implementation of the conversion of capital reserve into share capital in the company’s reorganization plan, and it is planned to remove the rights on February 15. According to the announcement, the company took the existing total share capital of 622 million shares as the base and implemented the proportion of 25 shares per 10 shares, with a total of 1.556 billion shares. It is worth noting that the above 1.556 billion converted shares will not be distributed to the original shareholders and will be transferred by the restructuring investor at a consideration of 900 million yuan (i.e. 0.58 yuan / share, which is 1.8% of the current secondary market valuation).
According to the ex right calculation formula, if calculated according to the closing price of 3.17 yuan / share on February 7, the ex right reference price of the company is about 1.32 yuan / share. Since the original minority shareholders did not obtain the converted shares, this means that after the ex rights of the stock price are completed, the original shareholders may face the risk of losing 58% of the market value, while the new restructuring investors can obtain 127.59% of the investment floating profit.
\u3000\u3000 “Restructuring investors pay large sums of money to help the company get out of trouble, and the price of the transferred shares is generally about 50% of the share price in the secondary market. The price of the transferred shares in this restructuring is unprecedented, but the restructuring investors generate huge profits overnight, which seems to infringe on the interests of minority shareholders. Compared with the share price after ex rights, the current share price of the company is still high, and small and medium-sized investors are not responsible We must pay attention to the huge risk of losing our market value after ex rights. ” Senior market experts remind.
According to the data, by the end of September 2021, Fujian Start Group Co.Ltd(600734) total number of shareholders was 334.17 million.
the share price of restructuring investors is low
According to the announcement, Fujian Start Group Co.Ltd(600734) the reorganization plan takes the existing shares as the base and implements the conversion of capital reserve into shares according to the proportion of 25 shares per 10 shares, with a total conversion of 1.556 billion shares. It is reported that the equity registration date of the conversion of capital reserve into share capital is February 14 (the trading is suspended on the same day), the ex right and ex dividend date is February 15, and the listing date of the conversion into share capital is February 16.
Source: company announcement
Meanwhile, according to the reorganization plan ruled by Fuzhou intermediate people’s court in Fujian Province, all the converted shares will be given to the reorganization investors, and the original minority shareholders will not be able to obtain any shares. This also shows that small and medium-sized investors must pay attention to that there will be no change in the company’s shares held in the stock account before and after the ex right of the stock price.
In other words, the above 1.556 billion converted shares were obtained by the restructuring investors with a total payment of about 900 million yuan. This also means that the average consideration of restructuring investors is 0.58 yuan / share, and the share price is only 1.8% of the current secondary market valuation. The gap between the price per share paid by them and the current stock price of the company has become the focus of market attention.
For the risk that the original shareholders may lose their market value due to the reorganization plan, the company prompted in the announcement that if calculated according to the closing price of 3.17 yuan / share on February 7, the ex right reference price of the company is about 1.32 yuan / share. Since the original shareholder has not obtained the converted shares, the share price of the company after ex rights will be greatly different from that before ex rights, and the ex rights of the company’s shares may lead to the loss of the market value of the original shareholder.
If the closing price of the company is still 3.17 yuan / share on February 11 (the stock was suspended on February 14 and resumed on February 15), the share price of the company will be 1.32 yuan / share after ex rights on February 15. If small and medium-sized investors keep holding Fujian Start Group Co.Ltd(600734) 10000 shares unchanged, the market value of their accounts will change from 31700 yuan to 13200 yuan, with a direct loss of 18500 yuan, accounting for 58%.
It is worth noting that Fujian Start Group Co.Ltd(600734) the restructuring investors also involve 9 natural persons, and the participation of natural persons in the restructuring is rare in previous cases, and the above-mentioned persons can also designate a new subject to obtain the investment share of the restructuring investors.
Previously, Fujian Start Group Co.Ltd(600734) has received inquiry letters from the exchange twice, requesting further clarification on the above reorganization matters. Fujian Start Group Co.Ltd(600734) said that the price of the transfer of the company’s capital reserve into shares by the reorganization investor was determined after several rounds of negotiation between the company, creditors and the reorganization investor in combination with the actual situation of the company. In order to maintain the stability of the governance structure after the reorganization of the company, the industrial investors promised that the transferred shares would not be reduced in any form within 36 months from the date of registration in their name, and 11 financial investors such as Quzhou dongkun promised not to reduce their holdings in any form within 12 months.
delisting risk still exists
For Fujian Start Group Co.Ltd(600734) investors, the delisting risk is also worth paying attention to.
Fujian Start Group Co.Ltd(600734) due to the negative audited net profit in 2018 and 2019, losses for two consecutive years and the negative audited net assets of the company in 2019, the company’s shares have been warned of delisting risk in June 2020. At the end of 2020, the company’s net assets are still negative, so Fujian Start Group Co.Ltd(600734) shares continue to be warned of delisting risk.
According to the relevant provisions of the listing rules, if the net assets of the company are still negative at the end of 2021, the listing of the company’s shares will be terminated. At the same time, if the company’s 2021 financial and accounting report is issued with qualified opinions or negative opinions or audit reports that cannot express opinions, the listing of the company’s shares will also be terminated.
At the same time, in December 2021, Fujian Start Group Co.Ltd(600734) was filed for investigation by the CSRC on suspicion of illegal information disclosure. Up to now, the company’s investigation is still in progress.
To sum up, the delisting risk of Fujian Start Group Co.Ltd(600734) still exists. At present, Fujian Start Group Co.Ltd(600734) share price remains above 3 yuan. If delisting is determined, there will be a risk of decline in the share price.
the exchange regulates the reorganization of listed companies
In practice, most reorganization cases of listed companies will introduce reorganization investors to provide cash to repay debts and resume operations. The Listing Rules specify the disclosure requirements for public solicitation and other ways to confirm the reorganization investors, and urge relevant parties to disclose the basic information, related relationship, investment agreement, payment consideration, locking arrangement, relevant commitments and other contents of the reorganization investors in time.
The low share price of restructuring investors is the focus of investors’ attention. On January 4, the Shanghai and Shenzhen stock exchanges respectively issued the guidelines on self discipline supervision of listed companies – bankruptcy reorganization and other matters (Draft for comments) and solicited public opinions on them.
Among them, if the transfer price of the shares is lower than 80% of the closing price of the company’s shares on the date of signing the investment agreement, it is required to hire a financial consultant to express special opinions on the rationality of the price and pricing basis and disclose them.
In addition to the transfer price of the reorganization investor, the financial adviser also needs to express his opinions in adjusting the ex right reference price and other matters, so as to actively create conditions for the bankruptcy reorganization system to play a role; The lawyer shall issue a legal opinion to the investor group meeting.
The Shanghai and Shenzhen Stock Exchange said that the essence of the bankruptcy reorganization plan is the game result of all parties in the market. Intermediaries should give full play to their professional role, participate in the reorganization process more deeply, strengthen the interest protection mechanism of small and medium-sized investors, and improve the compliance and transparency of information disclosure.
