For the two shell companies without actual operation, income and profit loss, a listed company in Shanghai stock market will buy them even if it empties all its cash. After the regulatory inquiry, they quickly cancelled the acquisition. Such a strange plot happened to Heilongjiang Interchina Water Treatment Co.Ltd(600187) ( Heilongjiang Interchina Water Treatment Co.Ltd(600187) . SH).
Heilongjiang Interchina Water Treatment Co.Ltd(600187) 3 disclosed on March 10 that it would earn the equity of the two companies under the actual controller’s name at a high price of 856 million yuan. The two companies had no operating income from 2019 to 2021 and were in a state of continuous loss, but the acquisition premium rate given by Heilongjiang Interchina Water Treatment Co.Ltd(600187) was as high as more than 30 times or even more than 27000 times.
Before this acquisition, Heilongjiang Interchina Water Treatment Co.Ltd(600187) also invested 200 million yuan to establish a company with related parties. However, after the establishment of the joint venture, the related parties did not really make a contribution. Of the 200 million yuan invested by Heilongjiang Interchina Water Treatment Co.Ltd(600187) investment, 100 million yuan has not been recovered so far. In order to cover up the truth, the company has even resorted to false letters.
If the acquisition continues, Heilongjiang Interchina Water Treatment Co.Ltd(600187) take out all the cash, which is not enough to pay for the equity transaction. Behind the bizarre transaction, it may be that the funds of major shareholders are tight. Not long ago, on March 2, the concerted action of its major shareholders also transferred more than 200 million Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) shares for debt repayment due to the expiration of equity pledge.
acquisition of shell companies at a premium of 26000 times
Heilongjiang Interchina Water Treatment Co.Ltd(600187) 3 announced on March 11 that the extraordinary general meeting of shareholders originally scheduled to be held on March 25 will be temporarily cancelled. The purpose of this shareholders’ meeting is to vote on the acquisition of the equity of Shanghai Pengxin high tech agricultural development Co., Ltd. (hereinafter referred to as “Pengxin agriculture”) and Qidong pengteng Agricultural Development Co., Ltd. (hereinafter referred to as “pengteng agriculture”).
Previously, on March 10, Heilongjiang Interchina Water Treatment Co.Ltd(600187) disclosed that it planned to acquire 100% equity of Pengxin agriculture and pengteng Agriculture held by Shanghai Pengxin (Group) Co., Ltd. (hereinafter referred to as “Pengxin group”) and Shanghai Pengxin agricultural investment (Group) Co., Ltd. (hereinafter referred to as “Pengxin investment”) at the price of 856 million yuan.
Pengxin group and Pengxin investment, which transferred the equity of the two companies, are related parties of Heilongjiang Interchina Water Treatment Co.Ltd(600187) . Pengxin investment is a 67.098% owned subsidiary of Yunnan Pengxin Fusheng Agricultural Development Co., Ltd., which is a wholly-owned subsidiary of Pengxin group, and the actual controller of Pengxin group is Jiang Zhaobai. As of the end of September last year, the three entities controlled by Jiang Zhaobai held about 25.73% of the shares of Heilongjiang Interchina Water Treatment Co.Ltd(600187) and were the actual controllers of the company.
The reason for canceling the shareholders’ meeting is because of regulatory inquiry. On the day of the disclosure of the above acquisition, the Shanghai Stock Exchange issued an inquiry to explain the company’s commercial rationality, necessity, subsequent capital investment and related financing arrangements, evaluation process, and whether there are potential interest arrangements.
Although the transaction scale is not small, public information shows that Pengxin agriculture and pengteng agriculture were established in December 1998 and June 2018 respectively. At present, they have not carried out actual operation. They have no operating income from 2019 to 2021 and are in a state of continuous loss.
According to the disclosed information, as of the end of January this year, the net assets of Pengxin agriculture and pengteng agriculture were – 9.29 million yuan and – 47.01 million yuan respectively, the operating income was 0, and the net profit lost 52000 yuan and 360000 yuan respectively, compared with 596000 yuan and 4.31 million yuan last year.
However, when Heilongjiang Interchina Water Treatment Co.Ltd(600187) acquired these two companies, they offered a high premium of tens of times or even tens of thousands of times.
According to the disclosure, the transfer consideration of Pengxin agricultural equity is about 274 million yuan, equivalent to a book value premium rate of 306184%. The transfer price of pengteng agriculture was 582 million yuan. Compared with the book net assets, the premium rate reached an amazing 269561083%.
At the same time of high premium, both parties can’t wait for the payment schedule of equity transfer. According to the agreement, Heilongjiang Interchina Water Treatment Co.Ltd(600187) shall pay all equity transfer funds to Pengxin group and Pengxin agriculture within 30 working days after the contract takes effect.
If the transfer can be completed, Heilongjiang Interchina Water Treatment Co.Ltd(600187) will be “hollowed out”. Three quarterly data show. As of the end of September last year, the company’s monetary capital balance was only 640 million yuan. Even if all of them were taken out to pay for the equity transfer of the above two companies, there was still a capital gap of nearly 220 million yuan.
major shareholders still have 100 million outstanding
There is no income and the purchase price is extremely high. The business of Pengxin agriculture and pengteng agriculture has nothing to do with Heilongjiang Interchina Water Treatment Co.Ltd(600187) existing main business.
According to the disclosure, the main business of Pengxin agriculture is farming, animal husbandry and fishery, breeding, trade, tourism services, real estate development and operation, while the main business of pengteng agriculture is agricultural technology promotion, as well as the sales and maintenance of additives, machinery and equipment such as vegetables, fruits, flowers and seedlings.
While Heilongjiang Interchina Water Treatment Co.Ltd(600187) currently mainly engaged in sewage treatment, this equity transfer is a cross industry acquisition. The company said that the acquisition is the company’s layout to the emerging agricultural field, improves the company’s comprehensive profitability and core competitiveness, and is conducive to the company’s long-term development,.
Heilongjiang Interchina Water Treatment Co.Ltd(600187) plans to acquire two companies. At present, the main assets are land use rights. Among them, there are 951 mu of agricultural land under the name of Pengxin agriculture, which is located in Chongming County, Shanghai, with an estimated value of about 315000 yuan per mu; Pengteng agriculture owns 3.72 million square meters of land through 42 subsidiaries, but the land is also used for agricultural planting, and the evaluation value is about 120000 yuan per mu.
This has also become the main reason for the high equity premium of the two companies. The company said that Pengxin’s agricultural land use right was purchased earlier and the purchase cost was low. With the rapid development of the land market in recent years, the value of the land use right increased significantly, resulting in the appreciation of the evaluation. The purchase price of pengteng agricultural equity also increased significantly for the same reason.
In this regard, the Shanghai Stock Exchange asked the company in the inquiry letter to supplement and disclose the evaluation process of all land use rights of pengteng agriculture, and set the price of surrounding land and similar transactions in the market, explain whether the price of this transaction is reasonable, and ask the asset appraiser to express his opinions.
This is not Heilongjiang Interchina Water Treatment Co.Ltd(600187) the first time that has conducted large related party transactions with the actual controller. In March 2020, the company and its related party Shanghai Pengdu Health Technology Development Co., Ltd. (hereinafter referred to as “Pengdu health”) invested 200 million yuan and 800 million yuan respectively to establish Shanghai Pengdu Health Technology Development Co., Ltd. (hereinafter referred to as “Pengdu health”) to develop a comprehensive service platform with health management as the core.
Pengdu health is 58% and 42% owned by Jiang Lei and Jiang Zhaobai respectively, and Jiang Lei and Jiang Zhaobai are brothers. Later, the partner of Pengdu health was changed from Pengdu health to Shanghai Xinhu Industrial Development Co., Ltd., but the indirect shareholders of the latter were Jiang Zhaobai brothers and Pengxin group.
At the end of December last year, Heilongjiang Interchina Water Treatment Co.Ltd(600187) decided to withdraw capital from Pengdu Yiyang because the progress of the project did not meet expectations. According to the disclosure of Heilongjiang Interchina Water Treatment Co.Ltd(600187) this January and February, Pengdu Yiyang was officially established on April 20, 2020, and both parties paid the registered capital in full three days later.
Just one day after the above disclosure, the mystery was revealed: the real reason for the withdrawal of capital is that Pengdu health has no actual capital contribution at all. On February 24 this year, because Pengdu health did not really pay 800 million yuan of registered capital, Heilongjiang Securities Regulatory Bureau ordered the company to correct the inaccurate letter phi.
major shareholders are short of funds
Not only has the project not been completed, but the funds invested in Pengdu have not been fully recovered so far.
According to the disclosure of Heilongjiang Interchina Water Treatment Co.Ltd(600187) february 23, as of the previous day, the principal of the investment fund returned by Pengdu Yiyang has been received with RMB 100 million and interest of RMB 8.84 million. The remaining 100 million yuan of principal and interest will be fully repaid by the joint venture before March 21.
However, the company did not make any explanation on the actual construction progress and ownership of the project, as well as whether the investment fund actually constitutes investment and whether it involves capital occupation.
This has attracted regulatory attention. In the inquiry letter on March 10, the Shanghai Stock Exchange also requested Heilongjiang Interchina Water Treatment Co.Ltd(600187) , stating the rationality of the company’s cash acquisition of its assets and whether there are relevant potential interest arrangements when the controlling shareholder and its related parties have not returned all the investment funds as agreed.
When the joint establishment of Pengdu health care, Pengdu health funds were tight. Like the two companies acquired by Heilongjiang Interchina Water Treatment Co.Ltd(600187) this time, Pengdu health had no income at that time. According to the disclosure, by the end of 2019, Pengdu health had no operating income, total assets of 877 million yuan, net assets of 100 million yuan and asset liability ratio of nearly 90%.
Including Heilongjiang Interchina Water Treatment Co.Ltd(600187) , Jiang Zhaobai’s “Pengxin system” currently has the control of three A-share and one H-share listed companies, but the current capital situation may not be optimistic. Shortly before the transaction, Pengxin group also transferred more than 200 million shares of Pengxin agriculture and animal husbandry due to the breach of equity pledge.
According to the disclosure of Pengxin agriculture and animal husbandry on March 2, the shareholder Lhasa Economic and Technological Development Zone Houkang Industry Co., Ltd. (hereinafter referred to as “Houkang industry”) pledged the shares of Guokai securities to look forward to repurchase, involving a principal balance of about 498 million yuan. On February 28th, Houkang industry transferred its 204 million shares to Shenwan Hongyuan Group Co.Ltd(000166) , and the proceeds were used to repay Houkang industry’s borrowings from CDB securities in accordance with the notice of Shenzhen Stock Exchange on matters related to the default disposal of stock pledge repo transaction through agreement transfer. By the end of September last year, Houkang industry held Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) 984 million shares, with a shareholding ratio of 15.45%. Pengxin agriculture and Pengxin group also held 26.3% and 10.93% of the shares of the company. Houkang industry, Pengxin agriculture and Pengxin group are acting in concert. In the same period, Houkang industry also held Heilongjiang Interchina Water Treatment Co.Ltd(600187) 158 million shares, with a shareholding ratio of 9.59%, making it the first and second largest shareholder.
