Securities code: 605338 securities abbreviation: Zhongyin Babi Food Co.Ltd(605338) Announcement No.: 2022-006 Zhongyin Babi Food Co.Ltd(605338)
Announcement on the signing of equity transfer agreement and the progress of foreign investment
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
● Zhongyin Babi Food Co.Ltd(605338) (hereinafter referred to as “the company”) signed the investment cooperation agreement with four natural persons (Wang Yong, Wang Zhulin, Ding Jianfeng and Chen Xiangjun) (hereinafter referred to as “the counterparty”) on January 20, 2021 in order to optimize the production capacity layout and broaden the market area, It is agreed that the target company Wuhan Dexiang Zhongmao Food Co., Ltd. (hereinafter referred to as “Dexiang Zhongmao” and “target company”) will be established by the counterparty. After the formal operation of Dexiang Zhongmao has been completed for 12 months (starting from the fourth month of Dexiang Zhongmao’s establishment), and the acquisition preconditions agreed in the agreement are met, Holding 70% equity of Dexiang Zhongmao through equity transfer or equity transfer + capital increase. In order to speed up the company’s business expansion in Central China, and in combination with the current market and the operation of Dexiang Zhongmao in 2021, the company signed the equity transfer agreement on the transfer of Dexiang Zhongmao’s equity on February 23, 2022 through consultation with the counterparty. The company plans to transfer 75% of Dexiang Zhongmao’s equity with RMB 22.5 million. After the equity transfer, Dexiang Zhongmao will become a holding subsidiary of the company and be included in the scope of the company’s consolidated statements.
● this transaction does not constitute a connected transaction, nor does it constitute a major asset reorganization as stipulated in the administrative measures for major asset reorganization of listed companies and relevant documents. There are no major legal obstacles to the implementation of this transaction.
● this transaction does not need to be submitted to the board of directors and the general meeting of shareholders for deliberation.
● risk warning: Dexiang Zhongmao’s equity change still needs to go through the industrial and commercial change procedures, and there is uncertainty whether the relevant approval procedures can be completed.
1、 Overview of this foreign investment
(I) basic information of foreign investment
In order to optimize the company’s production capacity layout and expand the market area, the company and the counterparty signed the investment cooperation agreement on January 20, 2021, which agreed that the counterparty should set up the target company Dexiang Zhongmao, which will be officially operated for 12 months (the official operation time will be from the fourth month of Dexiang Zhongmao’s establishment) and meet the acquisition preconditions agreed in the agreement, Holding 70% equity of Dexiang Zhongmao through equity transfer or equity transfer + capital increase. The company held the 7th Meeting of the second board of directors on January 20, 2021 and deliberated and adopted the proposal on signing the agreement on foreign investment and cooperation. For details, see the announcement on signing the agreement on foreign investment and cooperation (Announcement No.: 2021-005) disclosed by the company on January 21, 2021.
(II) progress of foreign investment
In order to speed up the company’s business expansion in Central China, and in combination with the current market and the operation of Dexiang Zhongmao in 2021, the company signed the equity transfer agreement on the transfer of Dexiang Zhongmao’s equity on February 23, 2022 through consultation with the counterparty. The company plans to transfer 75% of Dexiang Zhongmao’s equity with RMB 22.5 million. After the equity transfer, the company will hold 75% of the equity of Dexiang Zhongmao, and the counterparties Wang Yong, Wang Zhulin, Ding Jianfeng and Chen Xiangjun will hold 19%, 2%, 2% and 2% of the equity of Dexiang Zhongmao respectively.
According to the Listing Rules of Shanghai Stock Exchange and the articles of association, this acquisition does not need to be submitted to the board of directors and the general meeting of shareholders for deliberation. This acquisition does not constitute a connected transaction, nor does it constitute a major asset reorganization stipulated in the administrative measures for major asset reorganization of listed companies.
2、 Basic information of the counterparty
The company has conducted necessary due diligence on the basic information of all parties to the transaction and their transaction performance ability.
(I) basic information of the counterparty
Wang Yong, male, China nationality, residence in Anqing, Anhui, ID number 34082219****12; As a freelancer in 2018 and 2019, he began to participate in the management of “good gift guest” and “good morning” brand related businesses in 2020 without foreign investment.
Wang Zhulin, male, China nationality, residence in Wuhan, Hubei, ID number 34082219****34; In the past three years, he has been mainly engaged in the market operation of the brand business of “good gift guest” and “good morning”, and served as the marketing director.
Ding Jianfeng, male, China nationality, residence in Anqing, Anhui, ID number 34082219****77; In the past three years, he has been mainly engaged in the production and market operation of the brand business of “good gift guest” and “early and appropriate point”, and successively served as the production manager and the director of the marketing department.
Chen Xiangjun, male, China nationality, residence in Wuhan, Hubei, ID number 34071119****18. In the past three years, he has been mainly engaged in the procurement, logistics and production of the brand business of “good gift customer” and “good morning”. He has successively served as the procurement director and production director. No foreign investment.
(II) as of the disclosure date of this announcement, the counterparty has no relationship with the company, its controlling shareholders and actual controllers, directors, supervisors and senior managers, and there are no other relationships that may or have caused the company to favor its interests.
(III) as of the disclosure date of this announcement, through inquiry on China execution information disclosure network, no counterparty has been included in the list of dishonest Executees by the people’s court.
(IV) as of the disclosure date of this announcement, there is no other relationship between the counterparty and the company in terms of property rights, business, assets, creditor’s rights and debts, personnel, etc.
3、 Basic information of transaction object
(I) basic information of the target company
Company name: Wuhan Dexiang Zhongmao Food Co., Ltd
Address: No. 3, Shixing Road, Zoumaling Street office, Dongxihu District, Wuhan
Registered capital: 6 million yuan
Legal representative: Wang Zhulin
Date of establishment: January 21, 2021
Main business: licensed items: food production; Food and Beverages; Food business (sales of prepackaged food) (items that must be approved according to law can only be carried out after being approved by relevant departments, and the specific business items shall be subject to the approval documents or licenses of relevant departments) general items: Catering Management; business management; Enterprise consulting management; Wholesale of kitchenware, sanitary ware and daily sundries; Sales of daily necessities; Sales of daily necessities; Sales of household appliances; Wholesale of hardware products; Retail of hardware products; Household appliances installation services; Sales of packaging materials and products; Housing lease; Office equipment leasing services; Non residential real estate leasing; Non edible Shenzhen Agricultural Products Group Co.Ltd(000061) primary processing; Edible Shenzhen Agricultural Products Group Co.Ltd(000061) retail; Edible Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale; Advertising design and agency; Advertising production; Graphic Artist Designer; Conference and exhibition services; Technical services, technical development, technical consultation, technical exchange, technology transfer and technology promotion (except for projects that must be approved according to law, business activities shall be carried out independently according to law with business license).
(II) main financial indicators and other descriptions of the subject company
As of December 31, 2021, Dexiang Zhongmao had total assets of RMB 25.1843 million, total liabilities of RMB 21.2252 million and net assets of RMB 3.9591 million; In 2021, Dexiang Zhongmao realized an operating revenue of 51.0717 million yuan and a net profit of -1.0409 million yuan (the above data were not audited by an accounting firm).
In December 2021, Dexiang Zhongmao supplied goods to 461 “good gift” and “good morning” brand stores and 174 “Barbie” stores.
(III) property rights
Up to now, the property rights of the subject matter of this transaction are clear, and there are no mortgages, pledges and any other restrictions on transfer. Dexiang Zhongmao equity does not involve major litigation, arbitration matters or judicial measures such as seizure and freezing, and there are no other circumstances that hinder the transfer of ownership.
The transaction price of this transaction is RMB 22.5 million. The above transaction price is the result of the company’s full due diligence on the target company and the investment cooperation agreement signed by both parties in January 2021. The company believes that the pricing of this transaction is relatively fair, and there is no situation that damages the interests of the company’s shareholders, especially the minority shareholders.
(IV) changes in equity structure and capital contribution ratio before and after the acquisition
Before and after this transaction
No. name of shareholder subscribed capital contribution subscribed capital contribution
Shareholding ratio of (10000 yuan) (10000 yuan)
1 Zhongyin Zhongyin Babi Food Co.Ltd(605338) — 450 75%
limited company
2 Wang Yong 450 75% 114 19%
3 Wang Zhulin 60 10% 12 2%
4 Ding Jianfeng 60 10% 12 2%
5 Chen Xiangjun 30 5% 12 2%
Total 600 100% 600 100%
4、 Main terms of equity transfer agreement
The equity transfer agreement is signed by the company (hereinafter referred to as “party a”) and Wang Yong (Party B 1), Wang Zhulin (Party B 2), Ding Jianfeng (Party B 3) and Chen Xiangjun (Party B 4) (hereinafter collectively referred to as “Party B”). The main terms are as follows:
(I) equity transfer
1. Party B holds 100% of the equity of the target company and agrees to transfer 75% of the equity to Party A. the specific transfer arrangement is as follows:
(1) Party B 1 holds 75% of the equity of the target company and transfers 56% of the equity to Party A;
(2) Party B 2 holds 10% of the equity of the target company and transfers 8% of the equity to Party A;
(3) Party B 3 holds 10% of the equity of the target company and transfers 8% of the equity to Party A;
(4) Party B 4 holds 5% of the equity of the target company and transfers 3% of the equity to Party A.
2. All parties to the equity transfer agree to unconditionally waive the preemptive right to all the above equity transfers. After the transfer, the equity structure of Dexiang Zhongmao is as follows: Party A holds 75% equity of Dexiang Zhongmao, and Party B holds 25% equity of Dexiang Zhongmao in total.
(II) equity consideration
1. The total equity of Dexiang Zhongmao is valued at thirty million yuan (¥ 30000000). Party A shall pay Party B RMB twenty-two million five hundred thousand only (¥ 22.5 million) for 75% of the equity transferred by Party A, and Party B shall obtain the above transfer payment according to their respective transfer proportion.
2. According to the investment cooperation agreement signed by Party A and Party B in January 2021, Party A has paid a total deposit of 5 million yuan to Party B. After the signing of this agreement, the deposit will be converted into the advance payment for equity transfer paid by Party A to Party B. the total remaining equity transfer payment of Party B is seventeen million five hundred thousand yuan (¥ 17500000), that is, Party A pays thirteen million five hundred thousand yuan (¥ 13050000) to Party B 1, one million nine hundred thousand yuan (¥ 1900000) to Party B 2, one million nine hundred thousand yuan (¥ 1900000) to Party B 3 Pay Party B 4 six hundred and fifty thousand yuan (¥ 650000).
(III) payment method of equity transfer
Within 7 working days from the date of signing the formal agreement, Party A shall pay Party B a total of five million two hundred and fifty thousand (¥ 5250000), that is, Party A shall pay Party B 1, Party B 2, Party B 3 and Party B 4 3.915 million yuan, 570000 yuan, 570000 yuan and 195000 yuan respectively.
Within 15 working days from the date of completing the industrial and commercial change registration procedures for equity transfer, Party A shall pay Party B a total equity transfer amount of twelve million two hundred and fifty thousand (¥ 12250000), that is, Party A shall pay 9.135 million yuan, 1.33 million yuan, 1.33 million yuan and 455000 yuan to Party B 1, Party B 2, Party B 3 and Party B 4 respectively.
(IV) time for Party A to enjoy shareholders’ rights and interests
After the target company completes the industrial and commercial change registration procedures for equity transfer, Party A begins to enjoy all the rights and obligations of the shareholders of the target company.
(V) Party B, Party B 1, Party B 2, Party B 3 and Party B 4 promise:
1. The registered capital of the target company is 6 million yuan, which must be fully paid in monetary capital before February 15, 2022.
2. Party B legally owns or controls all assets and businesses related to the “Haolike” and “zaoyidian” brands without any ownership disputes, and has the right to sign this Agreement and transaction documents and perform its obligations arising from this Agreement and transaction documents.
3. During the period of holding shares or holding office in the target company, Party B will go all out to invest in the business of the target company and try its best to expand business and interests for the target company.
4. Party B shall not, directly or indirectly, or help others to persuade the employees in the target company who master trade secrets or employees in key positions to leave the target company; Party B shall not directly or indirectly induce or encourage the employees of the target company to make statements that have an adverse impact on the target company or Party A
