A “snake swallowing elephant” asset restructuring in the coal power industry is imminent.
On February 7, Huaihe Energy (Group) Co.Ltd(600575) (600575) announced that it planned to plan major asset restructuring and suspended trading from February 8. Huaihe Energy (Group) Co.Ltd(600575) the suspension is related to two operations, including absorption and merger and asset purchase. Among them, the operation object of absorption and merger is Huainan Mining (Group) Co., Ltd. (hereinafter referred to as Huainan Mining), which is also the controlling shareholder of Huaihe Energy (Group) Co.Ltd(600575) .
According to the announcement, Huaihe Energy (Group) Co.Ltd(600575) plans to absorb and merge Huainan mining by issuing shares, convertible corporate bonds (if any) and paying cash to all shareholders of Huainan mining. After the completion of this merger, Huaihe Energy (Group) Co.Ltd(600575) will become the surviving company to inherit and undertake all assets, liabilities, businesses, personnel and all other rights and obligations of Huainan mining, and the legal person status of Huainan mining will be cancelled.
Meanwhile, Huaihe Energy (Group) Co.Ltd(600575) plans to purchase 10.70% equity of Huaihe Energy (Group) Co.Ltd(600575) Power Group Co., Ltd. held by it by issuing shares and convertible corporate bonds (if any) to CDB development fund Co., Ltd.
It is worth noting that on February 7, when the company’s announcement has not been released, the share price of Huaihe Energy (Group) Co.Ltd(600575) took the lead in rising the limit to close at 2.61 yuan / share. There were many doubts in the market.
In this regard, Lawyer Wang Zhibin of Shanghai Minglun law firm told the reporter of Securities Daily: “if there is no other public information that can cause stock price changes, I personally think it is reasonable to suspect that the inside information has been leaked in advance, and there may be a situation of mouse buying in advance.”
“In this case, there is a great possibility that the information will be leaked in advance.” Lawyer Yang Zhaoquan, director of Beijing Weinuo law firm, also told the reporter of Securities Daily.
The performance of Huaihe Energy (Group) Co.Ltd(600575) 2021 is not satisfactory.
According to the performance forecast, Huaihe Energy (Group) Co.Ltd(600575) it is expected that the net profit attributable to the shareholders of the listed company in 2021 will decrease by 31.7 million yuan to 61.7 million yuan compared with the same period of the previous year (statutory disclosure data), a year-on-year decrease of 6.67% to 12.98%. In 2020, the company’s net profit attributable to shareholders of listed companies was about 447 million yuan, with total assets of 17.6 billion yuan.
Due to the change of coal-fired power plant performance in this period, 575} said that the performance of wholly-owned power plants decreased due to the change of coal-fired power plant market in this period. In addition, the impact of non operating profit and loss is mainly due to the transfer and resettlement funds for resolving excess capacity of mines and the central and local supporting funds for coal mine safety transformation projects received in the previous period.
In contrast, Huainan Mining realized an operating revenue of 44.5 billion yuan and a total profit of 2.628 billion yuan as early as 2018. By the end of the third quarter of 2019, the total assets of Huainan mining industry had reached 115.772 billion yuan.
Public data show that Huainan is rich in mining resources. It is located in Huainan base, one of the two Huainan mining areas and one of the six large coal power bases. It has large coal resource reserves. The proven coal reserve in Huainan mining area is 20 billion tons, including 17.5 billion tons of recoverable reserves, and is rich in coal associated resources such as coalbed methane and Gaoling soil.
In fact, this is not Huaihe Energy (Group) Co.Ltd(600575) the first time to plan the “snake swallowing elephant” restructuring. As early as 2019, Huaihe Energy (Group) Co.Ltd(600575) announced the absorption and merger of Huainan mining, but finally ended in termination. The reason is that the relevant ownership certificates of land, houses and other related assets involved in the production and operation of some subordinate enterprises of Huainan Mining failed to be obtained as scheduled, and it is expected to be difficult to solve in the short term.
The announcement at that time said that after the completion of absorption and merger, the overall listing of coal and power related businesses of Huainan mining will be realized, which is conducive to greatly improving the asset scale and profitability of listed companies, making listed companies become a large integrated coal and electricity energy group.
In fact, in recent years, the coal industry has been promoting mergers and acquisitions.
The 2020 annual report on the development of coal industry issued by China Coal Industry Association emphasizes the need to cultivate 3-5 world-class coal enterprises with global competitiveness. Promote the merger and reorganization of enterprises and establish 1 billion ton coal enterprises. Encourage large coal enterprises to establish a fund for the revitalization and development of old mining areas, support cross industry, cross regional and cross ownership mergers and acquisitions of coal enterprises, and steadily solve the problems left over by history in old mining areas.
An unnamed coal industry analyst told the Securities Daily that putting Huaihe Energy (Group) Co.Ltd(600575) into the high-quality assets of the controlling shareholder is not only the requirement of the reform of state-owned enterprises, but also the general trend of the coal industry.
For the latest merger intention, Huaihe Energy (Group) Co.Ltd(600575) said that the transaction is still in the planning stage, the parties to the transaction have not signed a formal transaction agreement, the transaction still needs to perform the necessary internal decision-making procedures, and there is some uncertainty whether it can be reached.
