Stock abbreviation: Cnfc Overseas Fisheries Co.Ltd(000798) Stock Code: Cnfc Overseas Fisheries Co.Ltd(000798) Cnfc Overseas Fisheries Co.Ltd(000798)
And
Citic Securities Company Limited(600030)
On the non-public offering of shares by China Water Group COSCO
Letter on the preparation of the IEC meeting
Reply Report
Sponsor (lead underwriter)
March, 2002, North block, Zhuoyue Times Square (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong Province
China Securities Regulatory Commission:
Cnfc Overseas Fisheries Co.Ltd(000798) (hereinafter referred to as "the company", "the issuer" or " Cnfc Overseas Fisheries Co.Ltd(000798) ") received the letter on request to make preparations for the meeting of the stock issuance and Examination Committee of China Water Group COSCO non-public Development Bank (hereinafter referred to as "the notification letter") issued by your Association on February 22, 2022, Cnfc Overseas Fisheries Co.Ltd(000798) together with Citic Securities Company Limited(600030) (hereinafter referred to as the "sponsor") and other intermediaries, has checked and implemented the relevant issues one by one. Now, the reply to the relevant issues of the notification letter of your association is as follows (hereinafter referred to as the "notification letter reply report"), please review it. The company guarantees the authenticity, accuracy and completeness of the reply.
The report period and the last three years in the reply report refer to 2019, 2020 and 2021. Unless the context otherwise requires, the meanings of words used in other parts are consistent with the due diligence report on Cnfc Overseas Fisheries Co.Ltd(000798) 2021 non-public development of A-share shares. Any discrepancy between the total count and the mantissa of the sum of the sub item values in the reply report form of this notification letter is caused by rounding. The font of the reply report of this notification letter is as follows:
The questions listed in the notification letter are bold and bold
Answer to question
catalogue
catalogue 3 question 1: 4 question 2: 18 question 3: 30 question 4: thirty-five
On the implementation of commitments. According to the application materials, On December 24, 2021, China Agricultural Development Group issued the letter on the implementation progress of solutions to avoid horizontal competition with Cnfc Overseas Fisheries Co.Ltd(000798) Enterprises: "with regard to the relevant commitments issued by the company on March 23, 2016, it is further clarified as follows: (I) Within 6 months from the date of issuance of this letter of commitment, the entrusted management method shall be adopted to actually manage the tuna business of China reclaimed water company.
（2） China Agricultural Development Group promises to complete the sorting, integration and declaration of its offshore fishery assets in accordance with the principle of law and compliance within 18 months from the date of issuing this letter, so as to protect the interests of shareholders of listed companies. " The applicant is requested to explain: (1) the specific work done by the applicant, its controlling shareholders and actual controllers to solve the problem of horizontal competition since 2016, and the reasons and rationality for the failure to fulfill all the original commitments of horizontal competition; (2) Whether the reason for the failure to properly fulfill the original commitment existed before the commitment to avoid horizontal competition was issued on March 23, 2016, whether the enforceability was fully considered when the original commitment to avoid horizontal competition was issued, and whether the commitment related parties fully analyzed and demonstrated the realizability of the commitment before making the commitment, Whether it has promised to judge the matters that are obviously impossible to achieve according to the situation at that time, and whether the relevant information disclosure is accurate and complete; (3) Whether the applicant has timely fulfilled the review procedures for changing the horizontal competition commitment when the original horizontal competition commitment has not been fulfilled; (4) At present, the effectiveness and enforceability of commitments issued on horizontal competition, whether there are risks that cannot be fulfilled, and whether the relevant risks are fully disclosed.
The sponsor and the applicant's lawyer shall explain the verification basis and process, and express clear verification opinions.
reply:
1、 Since 2016, the specific work done by the applicant, its controlling shareholders and actual controllers to solve the problem of horizontal competition, and the reasons and rationality for the failure to fulfill all the original horizontal competition commitments
(I) specific work done by the applicant, its controlling shareholders and actual controllers to solve the problem of horizontal competition since 2016
China Agricultural Development Group Co., Ltd. (hereinafter referred to as "China Agricultural Development Group"), the controlling shareholder and actual controller of the applicant, has actively promoted the issuer and relevant units to solve the problem of horizontal competition since the letter on solutions to avoid Cnfc Overseas Fisheries Co.Ltd(000798) horizontal competition was issued on March 23, 2016, The first is to make listed companies further focus on tuna fishing business through asset injection, and the second is to divest other non related businesses. The details are as follows:
On December 15, 2016, the applicant signed the business transfer agreement with China Aquatic Products Co., Ltd. (hereinafter referred to as "Zhongshui company") subordinate to China Agricultural Development Group and its subsidiary Zhongyu global marine food Co., Ltd. (hereinafter referred to as "Zhongyu global"), China Fisheries global transferred its ultra-low temperature tuna longline fishing business (the subject is 17 ultra-low temperature tuna longline fishing ships) at a price of 163 million yuan to the applicant, and the transfer price was determined by both parties through negotiation based on the assessed value. This matter has been deliberated and approved by the issuer's first extraordinary general meeting in 2017 and announced.
2. Transfer squid fishing business and divest non tuna business
On December 14, 2018, the applicant signed the cooperation agreement on the establishment of China Agricultural Development Group Zhoushan ocean fishery Co., Ltd. (hereinafter referred to as "IFAD ocean fishery company") with China Agricultural Development Group and China aquatic products Zhoushan ocean fishery Co., Ltd. (hereinafter referred to as "zhouyu company"). China Agricultural Development Group invested 100 million yuan in cash, accounting for 23.81% of the equity; The boat fishing company invested 215 million yuan, accounting for 51.91% of the equity, with its ocean squid fishing boats and associated assets, creditor's rights, liabilities and labor force; The applicant invested 105 million yuan, accounting for 25% of the equity, with the six ocean squid fishing boats owned by the applicant and the associated assets, creditor's rights, liabilities and labor force. The matter has been deliberated and approved by the applicant's first extraordinary general meeting in 2018 and announced.
On September 30, 2021, China Agricultural Development Group, zhouyu company, the issuer and its subsidiary Zhejiang Fenghui ocean fishery Co., Ltd. (hereinafter referred to as "Zhejiang Fenghui") signed the capital increase and share expansion agreement, which agreed that the applicant would contribute to the agricultural development ocean fishery company with the last squid fishing ship Fenghui 9 owned by the applicant at the assessed value of 33.083 million yuan.
The squid fishing vessel was acquired by the applicant through the overall acquisition of the tuna longline fishing fleet of Zhejiang Fenghui ocean fishery company in November 2019. The matter has been deliberated and approved by the second extraordinary general meeting of shareholders in 2021 and announced. After the above-mentioned squid business has been funded by the issuer twice, there is no squid business.
So far, after the above integration, only the remaining tuna business of Zhongshui company, a subsidiary of China Agricultural Development Group, has horizontal competition with the applicant.
3. China Agricultural Development Group issued an announcement to clarify the time and method of continuing to fulfill the previous commitment
In order to further clarify the measures taken by China Agricultural Development Group to solve the horizontal competition in the subordinate ocean fishery sector and protect the interests of listed companies, China Agricultural Development Group issued the letter on the implementation progress of the solution to avoid horizontal competition with Cnfc Overseas Fisheries Co.Ltd(000798) on December 24, 2021. The progress letter was announced on December 28, 2021 to fulfill the previous commitment with a more clear injection method and strict injection time. The details are as follows: "in order to improve the quality of listed companies, continuously improve their comprehensive operation ability and core competitiveness of the main business of Pelagic Fisheries, continue to fully fulfill the relevant matters of the previous commitment letter, and promote Cnfc Overseas Fisheries Co.Ltd(000798) healthy and sustainable development, the relevant commitments issued by the company on March 23, 2016 are further clarified as follows:
(I) within 6 months from the date of issuance of this letter of commitment, the entrusted management method shall be adopted to actually manage the tuna business of China reclaimed water company.
(II) at present, China Agricultural Development Group is divided into three enterprises engaged in or involved in Pelagic Fisheries: Cnfc Overseas Fisheries Co.Ltd(000798) , Zhongshui company and zhouyu company. On the basis of adhering to the principle that " Cnfc Overseas Fisheries Co.Ltd(000798) remains unchanged in the group's strategic positioning in the ocean fishery sector, the Group continues to promote the reorganization and integration of ocean fishery and the goal of injecting high-quality assets into Cnfc Overseas Fisheries Co.Ltd(000798) remains unchanged", China Agricultural Development Group promises that within 18 months from the date of issuing this letter, in accordance with the principle of legal compliance, Complete the sorting, integration and declaration of its offshore fishery assets to protect the interests of shareholders of listed companies.
(III) if the company and its actually controlled subsidiaries encounter business opportunities within the scope of Cnfc Overseas Fisheries Co.Ltd(000798) main business, the company and its actually controlled subsidiaries promise to transfer such business opportunities to Cnfc Overseas Fisheries Co.Ltd(000798) with Cnfc Overseas Fisheries Co.Ltd(000798) consent. Meanwhile, the company and Cnfc Overseas Fisheries Co.Ltd(000798) have reached an agreement through consultation and through necessary resolution procedures, and can take advantage of the company's brand, resources, finance and other advantages to cultivate businesses or assets that meet the business development needs of Cnfc Overseas Fisheries Co.Ltd(000798) but are not suitable for its implementation temporarily in accordance with the market principles. When the company transfers and cultivates mature business, Cnfc Overseas Fisheries Co.Ltd(000798) has the preemptive right under the same conditions.
The company promises that in addition to the above circumstances, the company will not add related businesses that compete with Cnfc Overseas Fisheries Co.Ltd(000798) in the same industry in the future.
(IV) if the company violates the above commitments, the proceeds will belong to Cnfc Overseas Fisheries Co.Ltd(000798) all; If Cnfc Overseas Fisheries Co.Ltd(000798) causes losses, the company shall be liable for compensation accordingly.
If the commitment cannot be fulfilled or needs to be delayed due to objective reasons beyond the control of China Agricultural Development Group, such as relevant national laws and regulations, industrial policy adjustment, epidemic situation, natural disasters, market changes and other objective reasons, China Agricultural Development Group will perform relevant procedures in accordance with the requirements of relevant national laws and regulations, timely disclose relevant information and fully protect the interests of listed companies and their shareholders. "
(II) reasons and reasonableness for the failure to fulfill all the original horizontal competition commitments
1. The applicant's main business development strategy focuses on tuna fishing and industrial chain extension
According to the commitment letter issued by China Agricultural Development Group in March 2016, it is clear that: (1) Cnfc Overseas Fisheries Co.Ltd(000798) is the platform for the development and integration of the main business of pelagic fishery determined by the development strategy of China Agricultural Development Group and the main body for the implementation of the development plan of pelagic fishery sector. China Agricultural Development Group follows the principle of "one enterprise, one policy, one mature and one promotion", Continue to promote the reorganization and integration of Pelagic Fisheries, and inject the assets with good operating performance and meeting the listing conditions into Cnfc Overseas Fisheries Co.Ltd(000798) . (2) On the basis of adhering to the above principles, China Agricultural Development Group will continue to integrate the group's Unlisted ocean fishery assets and optimize and adjust the scope of assets injected into Cnfc Overseas Fisheries Co.Ltd(000798) according to the changes of ocean fishery industrial policies, enterprise business environment and operating conditions and the actual needs of Cnfc Overseas Fisheries Co.Ltd(000798) business development.
Therefore, the implementation of the letter of commitment requires, on the one hand, to inject high-quality pelagic fishery assets into listed companies, and on the other hand, to optimize and adjust the injection scope based on Cnfc Overseas Fisheries Co.Ltd(000798) its own development strategy.
According to the "13th five year plan" development strategy of Cnfc Overseas Fisheries Co.Ltd(000798) , it began to implement the "professional" business strategy, focusing on tuna fishing and the extension of relevant industrial chains, and no longer engaged in squid fishing and other businesses. Based on this, China Agricultural Development Group promoted the applicant to acquire its subordinate ultra-low temperature tuna longline fishing vessel and spin off the non tuna business of Listed Companies in 2016, 2018 and 2021, respectively, to help it focus on the main tuna industry and improve its profitability. After the completion of the above asset restructuring, China Agricultural Development Group has only some tuna business of Zhongshui company and horizontal competition with listed companies.
2. The tuna business of China reclaimed water company does not meet the injection conditions agreed in the original commitment letter
According to the original commitment letter, when the unlisted ocean fishery assets of China Agricultural Development Group meet all the following conditions, they will be regarded as assets with good operating performance and meeting the listing conditions, On the one hand, it is agreed that the assets to be injected need to be "in line with the development strategy of China Agricultural Development Group, which is conducive to Cnfc Overseas Fisheries Co.Ltd(000798) enhancing the ability of sustainable operation, and there will be no adverse change trends such as Cnfc Overseas Fisheries Co.Ltd(000798) decline in Cnfc Overseas Fisheries Co.Ltd(000798) earnings per share and forecast decline in Cnfc Overseas Fisheries Co.Ltd(000798) profitability after reorganization".
In principle, the average value of the weighted average return on net assets of the assets to be injected in the last three fiscal years shall not be less than 10% (the calculation method of the weighted average return on net assets shall be subject to the provisions issued by the securities regulatory authority. Compared with the net profit before deduction, the lower one shall be taken as the calculation basis of the weighted average return on net assets) Cnfc Overseas Fisheries Co.Ltd(000798) due to the need of business development, take the initiative to reduce the performance requirements such as the return on net assets of the assets to be injected. " At the same time, in addition to the above financial conditions, it is also necessary to meet the conditions of clear asset ownership and compliance with relevant Fishery Policies and regulations.
According to the operation of tuna business of reclaimed water company under China Agricultural Development Group since 2016, its performance fluctuates greatly, its financial indicators do not meet the above agreements, fail to meet the injection conditions, and Cnfc Overseas Fisheries Co.Ltd(000798) has not taken the initiative to reduce the return on net assets of the assets to be injected due to the needs of business development.
To sum up, the reason why the original commitment was not fully fulfilled is that on the one hand, the Cnfc Overseas Fisheries Co.Ltd(000798) development strategy was adjusted to focus on tuna fishing and extending the industrial chain, so China Agricultural Development Group adjusted the scope of asset injection and integration accordingly; On the other hand, the tuna business that the reclaimed water company under China agricultural development group failed to inject was not completed because it did not meet the injection conditions agreed in the original commitment letter. The above reasons are reasonable.
2、 Whether the reason for the failure to properly fulfill the original commitment existed before the commitment to avoid horizontal competition was issued on March 23, 2016, whether the enforceability was fully considered when the original commitment to avoid horizontal competition was issued, whether the relevant parties to the commitment fully analyzed and demonstrated the realizability of the promised items before making the commitment, and whether they promised the obviously impossible items judged according to the situation at that time, Whether relevant information disclosure is accurate and complete
(I) whether the reasons for the failure to fully fulfill the original commitments were issued on March 23, 2016 to avoid horizontal competition
