Just announced the completion of the acquisition and transfer of 36% equity of Yajin technology, a company affiliated to Nanfu battery, Anhui Andeli Department Store Co.Ltd(603031) (SH: 603031) started the acquisition of 15% equity, with a consideration of 1.35 billion yuan. This time, the fixed increase method was adopted to raise funds. On February 10, Anhui Andeli Department Store Co.Ltd(603031) issued several announcements related to major asset restructuring.
According to the third quarterly report of 2021, Anhui Andeli Department Store Co.Ltd(603031) has total assets of 1.696 billion yuan and current assets of 470 million yuan, including monetary capital of 88.01 million yuan.
Statistics show that Anhui Andeli Department Store Co.Ltd(603031) is mainly engaged in self operated department store retail. Its base is in Anhui market, including shopping centers, supermarkets, professional home appliance stores and other businesses. Since 2020, the loss of Anhui Andeli Department Store Co.Ltd(603031) has gradually expanded.
2.4 billion first shot
Anhui Andeli Department Store Co.Ltd(603031) the involvement in the field of batteries dates back to 2021.
On September 9, 2021, Anhui Andeli Department Store Co.Ltd(603031) issued a suggestive announcement of major asset restructuring, which planned to acquire 36% equity of Yajin technology held by Ningbo Yafeng at a price of no less than 2.4 billion yuan. At that time, it was disclosed that the unaudited net assets of Yajin technology was 1.62 billion yuan. The monetary capital disclosed in the 2021 semi annual report of Anhui Andeli Department Store Co.Ltd(603031) is 92 million yuan and the total assets is 1.699 billion yuan.
So where did the $2.4 billion acquisition come from?
According to the disclosure, the payment methods of 2.4 billion yuan include: 1.8 billion yuan is paid to Ningbo Yafeng in cash by Anhui Andeli Department Store Co.Ltd(603031) or its controlled enterprises, and the remaining 600 million yuan is paid by Chen Xuegao, the major shareholder and former actual controller of the company. The 600 million yuan comes from the transfer of Anhui Andeli Department Store Co.Ltd(603031) shares held by Chen Xuegao to Ningbo Yafeng. Therefore, the consideration of 600 million yuan is offset against each other.
On September 9, 2021, Anhui Andeli Department Store Co.Ltd(603031) immediately received the inquiry letter from the Shanghai Stock Exchange. The Shanghai Stock Exchange inquired that the proposed purchase price of the company’s existing business is tentatively no less than 600 million yuan. At the same time, Chen Xuegao paid 600 million yuan to Ningbo Yafeng on behalf of the company. The company did not return any funds between the return and return, The company is required to supplement the pricing basis of the assets to be purchased and whether the subsequent repayment will cause pressure on the company’s cash flow.
In the case of insufficient funds for the acquisition of the company’s target assets, it means that the company’s financing measures are insufficient. Listed companies are mainly engaged in self operated department store retail. Covid-19 epidemic has had a great impact on department store retail entities. Since 2020, the company’s revenue and profit have shown a downward trend. If the transaction is completed, Nanfu battery controlled by Yajin technology will become the holding subsidiary of the listed company, which can bring stable operating income and profits to the listed company.
The company also said that in the cash consideration paid for this acquisition, in addition to the 656 million yuan raised by business disposal, the listed company also needs to introduce minority shareholders through its holding subsidiaries for equity financing of 1.1 billion yuan and debt financing of 700 million yuan.
According to the data, Nanfu battery was established in 1988 and was controlled by Morgan Stanley in 2000. In 2003, it was resold to its competitor Gillette in the United States. In 2005, P & G acquired Gillette and became a company controlled by P & G. in 2016, Nanfu battery became the holding subsidiary of Yajin Technology. Then, a series of changes took place in the equity structure of Nanfu battery.
Anhui Andeli Department Store Co.Ltd(603031) pointed out in the announcement that the frequent change of control caused Nanfu battery to miss the best opportunity to be listed in China’s capital market. Since 2016, all the shares of Yajin technology held by Ningbo Yafeng have been pledged, resulting in great uncertainty in its listing in China. It is expected that Ningbo Yafeng will sell the shares of Yajin technology to solve its own capital liquidity problem.
do it again
On December 8, 2021, Anfu energy, a subsidiary of the listed company, completed the industrial and commercial registration of capital increase. The investors included four companies including Ningbo Jiuge Zhonglan equity investment partnership (limited partnership), and Anfu energy received a capital increase of 1.1 billion yuan. On January 27, 2022, Anhui Andeli Department Store Co.Ltd(603031) announced that 36% of the shares of Yajin technology have been transferred and registered to Anfu energy, and announced that the company has changed from the traditional department store retail industry to the battery industry.
In response to the Shanghai Stock Exchange’s inquiry earlier, Anhui Andeli Department Store Co.Ltd(603031) once said that Yajin technology promised a total net profit of 1.97 billion yuan in the next three years, and the company can solve some of the capital sources of future repayment through dividends.
After completing the change, just after the Spring Festival holiday in 2022, Anhui Andeli Department Store Co.Ltd(603031) began to acquire 15% equity of Yajin technology without stopping. The transaction price of 15% equity of Yajin technology is determined to be 1.35 billion yuan.
It is worth noting that the equity value corresponding to the two determined prices is not consistent.
In the previous acquisition, as of August 31, 2021, the assessed value of all shareholders’ equity of Yajin technology’s parent company was RMB 9.236 billion, with a book value increase rate of 586.33% compared with the consolidated statements. The corresponding appraisal value of the 36% equity of Yajin technology is RMB 3.325 billion, and the final transaction price is determined as RMB 2.4 billion. Based on this calculation, the 100% equity of Yajin technology is equivalent to 6.666 billion yuan.
In this transaction, also as of August 31, 2021, the assessed value of all shareholders’ equity of Yajin technology’s parent company was still 9.236 billion yuan, with a book value appreciation rate of 586.33% compared with the consolidated statement. The corresponding appraisal value of the 15% equity of Yajin technology was 1.385 billion yuan, and the final transaction price was finally determined as 1.35 billion yuan. Based on this calculation, the 100% equity of Yajin technology is equivalent to 9 billion yuan.
In this regard, the company said that in the first transaction, one of the main demands of the counterparty Ningbo Yafeng is to quickly solve its own capital liquidity problems. Therefore, this transaction adopts cash transaction and agrees to give a certain degree of price discount to the listed company.
So, where did the 1.3 billion fund come from? While issuing the acquisition plan, Anhui Andeli Department Store Co.Ltd(603031) issued the fixed increase plan, which plans to raise no more than 1.35 billion yuan from no more than 35 specific objects for the acquisition of 15% equity of Yajin technology.
In the previous announcement, the company said that the annual financial cost of the 700 million loan is expected to be about 35 million yuan according to the annual interest rate of 5%. In the fixed increase announcement, the company pointed out that the previous 700 million yuan of bank loan financing led to an increase in the company’s asset liability ratio and financial expenses. If the company adopts debt financing, the asset liability ratio of listed companies will further increase significantly.
It is worth noting that the asset freeze risk involved in the lawsuit related to Yajin technology has not been lifted, and the lawsuit is related to Yunnan Unicom. On January 8, 2021, Yunnan Unicom requested the court to order Yajin technology to pay liquidated damages of RMB 269.2 million; Meanwhile, 82.18% equity of Nanfu battery, the core asset of Yajin technology, was preserved and frozen. On October 26, 2021, the intermediate people’s Court of Kunming, Yunnan Province issued the “ruling of execution”, which changed the content of freezing 82.18% equity of Nanfu battery to freezing 2.66% equity of Fujian Nanping Nanfu Battery Co., Ltd. held by Yajin technology. Yunnan Unicom has applied for reconsideration and has not yet issued a written ruling on the implementation of reconsideration.
In the future, Yajin technology may gradually become a wholly-owned subsidiary of Anhui Andeli Department Store Co.Ltd(603031) . Previously, Anhui Andeli Department Store Co.Ltd(603031) said that after the annual net profit of Yajin technology reaches a certain amount in 2022 or after, the company will timely start to acquire all the remaining shares of Yajin technology held by Ningbo Yafeng.
