Large coal production enterprise Huaihe Energy (Group) Co.Ltd(600575) (hereinafter referred to as Huaihe Energy (Group) Co.Ltd(600575) , 600575. SH) restarted major asset restructuring.
On the evening of February 7, Huaihe Energy (Group) Co.Ltd(600575) announced that it planned to issue shares, convertible corporate bonds and cash to all shareholders of Huainan Mining (Group) Co., Ltd. (hereinafter referred to as Huainan Mining) to absorb and merge Huainan mining.
Huainan mining is the controlling shareholder of Huaihe Energy (Group) Co.Ltd(600575) , with a shareholding ratio of 56.61%. It is the absorbed merger party in this asset restructuring. At present, the specific transaction amount has not been announced.
Huainan mining, founded in November 1981, is a large integrated coal and electricity energy group under the state owned assets supervision and Administration Commission of Anhui Province. It takes the production and sales of coal and electricity as the leading industry.
Huaihe Energy (Group) Co.Ltd(600575) was established in November 2000 and listed on the main board of Shanghai Stock Exchange in 2003. It is mainly engaged in railway transportation, thermal power generation, coal trade and power sales. According to the data of China Coal Industry Association, Huaihe Energy (Group) Co.Ltd(600575) last year’s raw coal output ranked 10th in China.
After this asset restructuring, Huaihe Energy (Group) Co.Ltd(600575) will add the main business of power production, and Huainan mining will realize the overall listing of coal and power assets.
Huainan mining has nine shareholders, including Huaihe Energy (Group) Co.Ltd(600575) Holding Group Co., Ltd., China Cinda Asset Management Co., Ltd., CCB Financial Asset Investment Co., Ltd. and Guohua Energy Investment Co., Ltd.
In addition, it also includes Bank of China Financial Assets Investment Co., Ltd., Jikai Enterprise Management Group Co., Ltd., Shanghai Electric Power Co.Ltd(600021) (600021. SH), CLP Guorui Supply Chain Management Co., Ltd. and Huaibei Mining Holdings Co.Ltd(600985) Co., Ltd.
After the merger, Huaihe Energy (Group) Co.Ltd(600575) as the surviving company, inherits and undertakes all the assets, liabilities, business, personnel and all other rights and obligations of Huainan mining, and the legal personality of Huainan mining will be cancelled.
At the same time, Huaihe Energy (Group) Co.Ltd(600575) plans to purchase 10.7% equity of Huaihe Energy (Group) Co.Ltd(600575) Power Group Co., Ltd. (hereinafter referred to as huaikuang power) by issuing shares and convertible corporate bonds to CDB fund.
As the transaction is still in the planning stage and there is still uncertainty, Huaihe Energy (Group) Co.Ltd(600575) has been suspended since the opening of the market on February 8, and the suspension is expected to be no more than 10 trading days.
In order to avoid horizontal competition, since 2016, Huaihe Energy (Group) Co.Ltd(600575) has been injected into some coal and power assets of Huainan Mining through asset restructuring.
In early 2019, the overall listing of Huainan mining was put on the agenda. In August of that year, Huainan Mining implemented the reform of increasing capital and shares, and its shareholders increased from three to nine.
In October 2019, Huaihe Energy (Group) Co.Ltd(600575) the board of directors deliberated and decided to acquire Huainan mining by issuing shares and paying cash, and the restructuring officially began.
Meanwhile, Huaihe Energy (Group) Co.Ltd(600575) plans to issue shares to purchase 10.7% equity of huaikuang power and 50% equity of Inner Mongolia Yinhong Energy Development Co., Ltd. (hereinafter referred to as Yinhong energy) held by Yongtai Honghe Holding Group Co., Ltd. (hereinafter referred to as Yongtai Honghe) and Li Defu.
However, due to limited rights and other circumstances, Huaihe Energy (Group) Co.Ltd(600575) adjusted the restructuring plan in May 2020 and gave up the 50% equity of Yongtai Honghe and Yinhong energy, one of the target assets.
Later, Huaihe Energy (Group) Co.Ltd(600575) terminated the asset restructuring in June 2020 and stopped purchasing 10.7% equity of Huainan mining power and 50% equity of Yinhong energy because the relevant ownership certificates of land, houses and other production and operation assets of some subordinate enterprises of Huainan Mining failed to be obtained as scheduled and are expected to be difficult to solve in the short term.
The performance of Huaihe Energy (Group) Co.Ltd(600575) has declined in recent three years. In 2019, the company’s net profit reached 880 million yuan, the highest in history; In 2020, the net profit was 475 million yuan, down about 46%.
The performance forecast shows that the net profit of Huaihe Energy (Group) Co.Ltd(600575) in 2021 is expected to decrease by 31.7-61.7 million yuan year-on-year, with a year-on-year decrease of 6.67% – 12.98%.
The company said that the decline in net profit was mainly affected by changes in supply and demand in China’s coal market and the increase in coal-fired costs of wholly-owned power plants.
On February 7, Huaihe Energy (Group) Co.Ltd(600575) shares rose by 10.13% to close at 2.61 yuan / share.
