Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) whether the reorganization has been carried out, which is also the first reorganization conference project of this year.
On February 18, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) announced that the CSRC had recently made a decision not to approve the application for the company to issue shares to purchase 56% equity of agricultural potassium resources and raise supporting funds.
Affected by this news, during the day, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) once fell nearly 5%, and finally closed at 25.14 yuan / share, down 2.63%, with a total market value of 19.03 billion yuan.
subject matter uncertainty
According to the documents of the CSRC, the M & a committee held the first meeting of the M & a committee in 2022 on January 26 to review the scheme of issuing shares to buy assets and raising supporting funds according to law.
According to the application documents, the M & a committee believes that there is great uncertainty in the future production and operation of the subject assets on schedule after the completion of this transaction, which is not in line with the provisions of paragraph 1 of Article 43 of the measures for the administration of major asset restructuring of listed companies.
The meeting of the M & a committee voted on the company’s plan by voting. The number of consent votes did not reach 3, and the plan was not adopted. In accordance with the company law, the securities law, the measures for the administration of major asset restructuring of listed companies and other relevant provisions, the application for the company to issue shares to purchase assets and raise supporting funds will not be approved.
The above restructuring plan of Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) began in December 2020.
At that time, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) announced that it planned to acquire 100% equity of agricultural potassium resources. At the end of July 2021, the company made a major adjustment to the trading scheme. 44% of the shares of agricultural potassium resources held by Zhongnong group, Jianfeng group and Qingfeng agricultural materials were excluded from the restructuring scheme, and only 56% of the shares of agricultural potassium resources held by the remaining seven companies were purchased at a price of 1.764 billion yuan. In this regard, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) has explained that since the disclosure of the transaction plan, the company has failed to reach a final agreement with the above three companies on transaction details such as transaction price and payment method.
Although the CSRC did not approve it, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) said that since the implementation of this transaction will help to enhance the core competitiveness of the company’s operation, improve asset quality and enhance sustainable profitability, it is in the interests of the company and all shareholders. On January, the board of directors considered and approved the proposal on raising 1 million tons of supporting assets for the expansion of the company in Laos, and decided to continue to promote the issue of supporting assets and payment of 1 million tons of supporting assets in the near future.
According to the opinions of the M & a committee, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) will continue to promote the reorganization from what aspects? The securities affairs representative of the company told the international finance news that the company is in a sensitive period of preparing periodic reports and does not necessarily give interview replies.
Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) landed in A-Shares in 1998 and is located in Guangzhou, focusing on the integration of potassium mining, potassium fertilizer production and sales. The company is currently in a state of no controlling shareholder and no actual controller.
lack of performance commitment
Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) the fate of reorganization has long been foreboding.
Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) it was previously disclosed that the book value of all equity of shareholders of agricultural potassium resources was 996700 yuan, the assessed value was 4.194 billion yuan, and the appreciation rate was 420685.75%. The premium rate of more than 4200 times surprised the market, while Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) said that the final transaction price of 56% equity of agricultural potassium resources was 1.764 billion yuan, which was reduced by 24.89% compared with the assessed value, which was conducive to protecting the interests of listed companies and minority shareholders. However, based on the purchase price of RMB 1.764 billion corresponding to 56% equity, the valuation of 100% equity of agricultural potassium resources is RMB 3.15 billion, and the premium rate is still as high as 1768 times.
What is more surprising is that such a high premium transaction has not set up performance commitment and performance compensation arrangements. Questioned by the CSRC, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) said that the counterparty did not have the ability and objective conditions to make performance commitment and performance compensation. Instead of making performance commitment and compensation arrangements, the transaction adopted discount acquisition and hedged possible acquisition risks with the discount part, which is a win-win strategy.
Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) the price to pay is much more than that. According to the restructuring report, after obtaining 56% of the equity of the target, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) will increase the capital of the target by no more than 1.52 billion yuan (calculated according to the valuation of 100% equity of 4.194 billion yuan). Based on the capital increase ceiling of 1.52 billion yuan, after the capital increase is completed, the company will hold 67.7% equity of agricultural potassium resources in total. Plus the transaction price of 1.764 billion yuan, this means that the price for Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) to obtain 67.7% equity of agricultural potassium resources is 3.284 billion yuan. According to this calculation, the valuation of agricultural potassium resources is as high as 4.85 billion yuan, exceeding the above evaluation value of 4.194 billion yuan.
Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) all the seven counterparties appeared in the list of restructuring counterparties in 2015. In 2015, its restructuring arranged performance gambling, but it was not completed in the end. In addition to other factors, the company, counterparties, former major shareholders and other parties fell into litigation disputes for several years, and the company was once faced with being issued an audit report that could not express opinions and was on the verge of delisting.
Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) therefore, it is argued that if the performance commitment is reluctantly made, the final promised performance cannot be completed, and the interests of listed companies and investors are still difficult to be effectively protected, which may repeat the mistakes of restructuring in 2015.
performance soared by 1292%
Is agricultural potassium a piece of fat?
Agricultural potassium resources, established in November 2020, has a wholly-owned subsidiary, Hong Kong minerals, registered in Hong Kong, while Hong Kong minerals has a wholly-owned subsidiary, Laos minerals, registered in Laos. The main business of Laos minerals is potash mining and processing, and its core assets are the potash mining right with an area of 179.8 square kilometers in Gambang Province, Laos, which has not been put into mining. The potash mine is one of the proven super large potash mines in Gammon Province, Laos. The estimated potash ore reserves are 3.936 billion tons and potassium chloride resources are 677 million tons.
While Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) claims that it has potash ore resources and production in the Dongtai ore section of nongbo mining area, Gammon Province, Laos. The total reserves of potash ore reach 1.002 billion tons, the resources of potassium chloride reach 152 million tons, the output scale has reached 250000 tons, and the construction of 1 million T / a potash fertilizer reconstruction and expansion project is under way. After the reorganization, the company’s Laos minerals will build a potash fertilizer project with an annual output of 2 million tons, promoting its overall potash fertilizer production capacity in Laos to 3 million tons / year. The Soochow Securities Co.Ltd(601555) research report points out that after the reorganization, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) will become the largest potash fertilizer resource enterprise in Asia.
The reporter noted that the 1 million T / a potash fertilizer reconstruction and expansion project in Laos was originally planned to be put into operation on July 1 last year, but there was a long delay. Until January 28 this year, the company announced that the 1 million ton reconstruction and expansion project in Laos has been put into operation and is expected to reach production in the near future.
Benefiting from the rising volume and price of potash fertilizer business, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) is expected to realize the net profit attributable to the parent company of RMB 830 million to RMB 930 million in 2021, with a year-on-year increase of 1292% to 1460%, deducting the non net profit of RMB 219 million to RMB 319 million, with a year-on-year increase of 4690% to 6878%. In addition, during the reporting period, the company has stripped off its trade and shipping business, which will no longer have a negative impact on the company’s net profit.
