Shanghai SHANGZHENG Hengtai law firm
About Yinyi Co.Ltd(000981) bankruptcy reorganization
Legal opinion on the calculation formula of ex right reference price for the adjustment of capital reserve converted into share capital
February 14, 2002
Shanghai SHANGZHENG Hengtai law firm
About Yinyi Co.Ltd(000981) bankruptcy reorganization
On the calculation formula of ex right reference price for the adjustment of capital reserve converted into share capital
Legal opinion
Shanghai SHANGZHENG Hengtai law firm (hereinafter referred to as “the firm”) has accepted the entrustment of Yinyi Co.Ltd(000981) (hereinafter referred to as “Yinyi shares” or “the company”) in accordance with the company law of the people’s Republic of China, the enterprise bankruptcy law of the people’s Republic of China and the stock listing rules of Shenzhen Stock Exchange (revised in 2022) The trading rules of Shenzhen Stock Exchange (revised in March 2021) (hereinafter referred to as the trading rules) and other laws, regulations, normative documents (hereinafter referred to as the “laws and regulations”) and the articles of Association issued a legal opinion on the calculation formula of ex right reference price for the conversion of capital reserve for bankruptcy reorganization of Yinyi shares into share capital. In order to issue this legal opinion, our lawyer declares as follows:
1. Our lawyers give legal opinions based on the facts that have occurred or exist before the issuance date of this legal opinion and the current laws, regulations, rules and relevant normative documents of China.
2. In order to issue this legal opinion, our lawyers consulted the documents that we considered necessary for issuing this legal opinion, made inquiries or necessary discussions with relevant personnel on relevant matters, and finally relied on the documents, materials, statements and explanations provided by Yinyi shares and relevant parties to the exchange.
3. Before issuing this legal opinion, Yinyi shares has made the following guarantee to the exchange: the company has provided the exchange with all and true original written materials, copies, copies or oral testimony necessary for issuing this legal opinion, and there is no falsehood, omission or concealment; If the documents are copies or copies, their contents shall be consistent with the original or the original; The documents and the signatures and seals on the documents are authentic; The signatories of all documents submitted to the exchange have full civil capacity, and their signing has been properly and effectively authorized; The validity of the original of each document has not been revoked by relevant government departments within its validity period, and it is held by its respective legal holders on the date of issuance of this legal opinion.
4. In this legal opinion, our lawyers only express legal opinions on matters that have occurred or exist before the issuance date of this legal opinion and are related to the calculation formula of ex right reference price of capital reserve converted into share capital adjustment in the equity adjustment scheme of bankruptcy reorganization contributors. The reference of our lawyers to the contents of relevant professional documents in this legal opinion does not mean that our lawyers make any express or implied guarantee for the authenticity and accuracy of these professional documents and the quoted contents and conclusions, and our lawyers do not have the professional qualification to check and judge these professional documents and the quoted contents.
5. This legal opinion is only used by Yinyi shares for the purpose of adjusting the calculation formula of ex right reference price for the conversion of bankruptcy reorganization capital reserve into share capital, and shall not be used for any other purpose.
6. Our lawyers agree that Yinyi shares shall quote and disclose the contents of this legal opinion, but the above quotation or disclosure shall be comprehensive and accurate and shall not lead to errors and deviations in the understanding of this legal opinion.
Based on the above, in accordance with the provisions of relevant laws and regulations and in accordance with the business standards, ethics and the spirit of diligence recognized by the lawyer industry, the office and the handling lawyers have verified and verified the relevant documents and relevant facts provided by the company, and now issue the following legal opinions:
1、 Scheme of converting capital reserve into share capital for bankruptcy reorganization of Yinyi shares and calculation formula of ex right reference price to be adjusted
(I) main contents of the scheme of converting capital reserve into share capital in the bankruptcy reorganization of Yinyi shares
On December 11, 2020, Yinyi Co., Ltd. held the second creditor meeting and investor group meeting, and voted and adopted the Yinyi Co.Ltd(000981) reorganization plan (Draft) (hereinafter referred to as the “reorganization plan”). On December 14, 2020, Ningbo intermediate people’s Court of Zhejiang Province (hereinafter referred to as “Ningbo intermediate people’s court”) ruled to approve the reorganization plan. The main contents of the equity adjustment plan of the investors of Yinyi shares have been disclosed by the manager of Yinyi shares in the announcement on the court’s ruling and approval of the reorganization plan (Announcement No.: 2020-130) on December 16, 2020.
According to the reorganization plan, the main contents of the equity adjustment of the investors of Yinyi shares and the conversion of capital reserve into share capital are as follows: Taking the existing total share capital of Yinyi shares as the base, the conversion of capital reserve into shares is implemented according to the proportion of 6.48 shares per 10 shares, and a total of 2610137444 shares can be converted into shares. After the conversion, the total share capital of Yinyi shares will increase from 4027989882 shares to 6638127326 shares. Then, taking 6638127326 shares as the base, the capital reserve will be increased according to the proportion of 5.06 shares per 10 shares, and a total of 3359343562 shares can be increased. Above, 5969481006 shares have been converted into shares (the final number of shares converted into shares shall be subject to the number actually registered and confirmed by CSDCC Shenzhen Branch). After the conversion, the total share capital of Yinyi shares will eventually increase to 9997470888 shares. The above converted shares shall be arranged in accordance with the following investor’s equity adjustment plan:
1. The capital reserve is converted into shares at the proportion of 6.48 shares per 10 shares, and a total of 2610137444 shares can be converted into shares. Among them: 1) 1855202169 shares to be distributed to Ningbo Yinyi Holding Co., Ltd., Ningbo Shengzhou Investment Co., Ltd. (hereinafter referred to as “Ningbo Shengzhou”), Tibet Yinyi Investment Management Co., Ltd. (hereinafter referred to as “Tibet Yinyi”) and Xiong Jikai (hereinafter collectively referred to as “controlling shareholders and their controlling shareholders”) will be preferentially used to complete performance compensation, The remaining 3752927 converted shares will be disposed of in accordance with the provisions of the reorganization plan and will not be distributed to the original shareholders. After the completion of performance compensation, the controlling shareholders and their controlling shareholders shall distribute a total of 1174433403 performance compensation shares and the remaining undistributed converted shares of 3752927, a total of 1178186330 shares, which will be transferred. After the final conversion, it will be used to introduce restructuring investors and solve the historical problems of Yinyi shares. 2) The 754935275 shares to be distributed to all shareholders except the controlling shareholders and their controlling shareholders will be distributed to the above shareholders registered on the equity registration date of the investor group meeting held on December 11, 2020 (i.e. December 4, 2020), If the shareholding of the above shareholders changes due to trading or non trading reasons after December 4, 2020 and before the implementation of the investor’s equity adjustment plan, the effectiveness of the investor’s equity adjustment plan shall extend to the transferee and / or successor of its shares, That is, the rights and obligations stated in the investor’s equity adjustment plan will be inherited by the above shareholders on the equity registration date determined when the plan is implemented.
2. Based on the total number of shares converted and increased as above, 3359343562 shares will be converted and increased according to the proportion of 5.06 shares per 10 shares, which will not be distributed to all shareholders. All shares will be transferred and specially used to introduce reorganization investors and pay off liabilities in accordance with the provisions of the reorganization plan.
The equity adjustment of the investors of Yinyi shares and the conversion of capital reserve into share capital are consistent with the reorganization plan.
(II) calculation formula of ex right reference price to be adjusted
According to article 4.4.2 of the trading rules: “the calculation formula of ex right (interest) reference price is:
Ex right (interest) reference price = [(previous closing price – cash dividend) + allotment price × Share change ratio] ÷ (1 + share change ratio).
If the securities issuer deems it necessary to adjust the above calculation formula, it may apply to the bourse for adjustment and explain the reasons. With the consent of the exchange, the securities issuer shall publish the calculation formula of the ex right (interest) reference price applicable to the ex right (interest) to the market. “
The calculation formula of ex right reference price for the conversion of capital reserve into share capital in the bankruptcy reorganization of Yinyi shares is proposed to be adjusted as follows:
Ex right (interest) reference price = [(previous closing price – cash dividend) + consideration for shares 2 obtained by restructuring investors × Share change ratio 2 + consideration for shares obtained by creditors × Share change ratio] / (1 + total share change ratio).
2、 Legal analysis opinions on adjusting the calculation formula of ex right reference price
(I) the calculation formula of ex right reference price for the adjustment of capital reserve converted into share capital is necessary
Ex rights refers to the behavior of adjusting the stock price by removing these factors from the stock price after the fact that the actual value of the enterprise represented by each share will decrease after the increase of the total share capital of the listed company. When the total share capital of a listed company increases, the stock price needs to be ex rights, mainly in the following two cases: 1. The capital reserve increased but the owner’s equity has not changed is converted to share capital or shares; 2. Allotment of shares of listed companies whose price is significantly lower than the market price.
Yinyi shares’ conversion of capital reserve into share capital this time is different from the behavior of simply issuing additional shares for dividend in a general sense. The conversion of capital reserve to share capital is a market-oriented and negotiated transaction through judicial procedures. The transferred shares will be mainly used to pay off debts with shares and introduce restructuring investors. The original shareholders of the company get less shares. According to the provisions of the reorganization plan, creditors will use about 6.135 billion yuan of creditor’s rights to pay off their debts with shares, and the reorganization investors will invest 3.2 billion yuan to acquire shares (about 2.449 billion of which will be used to solve the occupation of major shareholders and the return of cash dividends). On the whole, before and after the increase, while expanding the share capital, the company paid off and offset the company’s debts and increased the owner’s equity of the company. This equity adjustment is different from the situation that the owner’s equity of the company remains unchanged before and after the increase. Therefore, it is necessary to adjust the calculation formula of the reference price of the right of elimination accordingly.
(II) the calculation formula of the ex right reference price is adjusted in combination with the actual situation of the reorganization plan, and the adjustment method is reasonable
The parameters in the calculation formula of ex right reference price shall be combined with the actual situation of the reorganization plan and fully consider the impact of the consideration paid by the reorganization investors and creditors to obtain shares on the net assets of the company:
1. Since cash dividend, stock dividend and allotment are not involved, the price of cash dividend and allotment in the formula is 0.
2. A total of 1.549 billion new shares (equivalent to 38.46% of the total shares of the original company, i.e. the share change ratio is 38.46%) are used to offset the company’s debts by offsetting debts with shares, and the consideration per share is RMB 3.96.
3. A total of 2.988 billion shares (equivalent to 74.19% of the total share capital of the original company, i.e. the share change ratio is 74.19%) were transferred to the restructuring investors. The restructuring investors accepted these shares on the condition of paying cash consideration, solving the remaining problems of the company and providing business development support to the company, and paid a total cash consideration of RMB 3.2 billion. Among the shares transferred and cash consideration paid by the above-mentioned investors, (1) in order to realize the investment of restructuring investors in Yinyi shares and properly solve the historical problems of capital occupation and cash dividend return, the restructuring investors will pay the price of about RMB 2.07814/share (the interest on capital occupation will be calculated until December 31, 2020, that is, the consideration for shares 1 obtained by the restructuring investors), Transfer 1178186330 performance compensation shares available to the controlling shareholders and their controlling shareholders into shares (i.e. share 1 obtained by the restructuring investor, and the change proportion of share 1 obtained by the restructuring investor is 29.25%), The consideration obtained from the transfer will be used to pay off the funds occupied by its controlling shareholders and related parties and the cash dividends that Ningbo Shengzhou and Tibet Yinyi should return to Yinyi shares in accordance with the provisions of the reorganization plan. Since this part of stock payment will not substantially improve the owner’s equity of the company, it will not be used as the calculation base of this ex right price; (2) Through the market bidding method of publicly selecting reorganization investors in judicial proceedings, the reorganization investors transferred 1.810 billion shares transferred by all Yinyi shareholders to increase shares at a price of about 0.41522 yuan / share (i.e. the consideration for the reorganization investors to obtain share 2) (i.e. the reorganization investors to obtain share 2, and the change ratio of share 2 is 44.94%), For details, please refer to the announcement on the court’s ruling to approve the reorganization plan disclosed by the company on December 16, 2020. Because its main purpose is to conditionally introduce reorganization investors and pay off the liabilities of Yinyi shares by means of debt repayment, which will bring substantial value improvement to the owner’s equity of the company, it is used as the calculation base of this ex right price.
At the same time, in the specific calculation of the ex right price, due to the different impact of each part of the increase on the owner’s equity, based on the basic calculation logic that the stock price is equal to the total value of the stock divided by the total share capital, it is also necessary to distinguish, that is, whether it is used as the calculation base according to the situation described in this article.
4. The two parts of the investor’s equity adjustment plan should be considered in a unified way.
The “two conversion increases” mentioned in the investor’s equity adjustment plan are actually two parts of the same investor’s equity adjustment plan, and the “two conversion increases” are interdependent. In the first part, the conversion of value-added shares completed the performance compensation commitment of relevant shareholders through the conversion of value-added shares. At the same time, the major shareholders and their controlling shareholders introduced restructuring investors by transferring their own converted shares, which solved the problem of non operating capital occupation of controlling shareholders and related parties, and effectively protected the rights and interests of the company and minority shareholders; The second part is the conversion of value-added shares, which solves the problem of heavy debt burden of the company, effectively resolves the debt risk of the company, avoids the delisting of the company, and effectively protects the rights and interests of the company and minority shareholders. Since the realization of the above objectives at the same time depends on the implementation of the investor’s equity adjustment plan, and the “two-part increase conversion” in the investor’s equity adjustment plan is a part of the same investor’s equity adjustment plan in the same reorganization procedure
