Huatai United Securities Co., Ltd
About Shanghai Stock Exchange
Letter on the supervision of Guangdonghectechnologyholdingco.Ltd(600673) equity purchase and related party transactions
Verification opinions
Independent financial advisor
Date: March, 2002
Listed company management department I of Shanghai Stock Exchange:
Guangdonghectechnologyholdingco.Ltd(600673) (hereinafter referred to as ” Guangdonghectechnologyholdingco.Ltd(600673) ,” listed company “or” company “) disclosed the announcement of Guangdonghectechnologyholdingco.Ltd(600673) on the purchase of equity and related party transactions (pro 202224) on March 15, 2022, On March 16, 2022, the company received the working letter on the supervision of Guangdonghectechnologyholdingco.Ltd(600673) purchase of equity and related party transactions (SSE Gong Han [2022] No. 0188) (hereinafter referred to as the “working letter”) issued by the management department of listed companies of Shanghai Stock Exchange, and Huatai United Securities Co., Ltd. (hereinafter referred to as the “independent financial consultant”) together with listed companies and other relevant intermediaries, After careful analysis and verification of relevant issues, we hereby express our verification opinions on relevant matters.
Unless otherwise specified, the abbreviation used in this verification opinion has the same meaning as the abbreviation in the report on Guangdonghectechnologyholdingco.Ltd(600673) major asset sale and related party transactions (Draft) (Revised) announced by the listed company on December 11, 2021. The financial data in this verification opinion shall be kept to two decimal places. If the total number is inconsistent with the mantissa of the sum of the itemized values, it shall be caused by rounding.
Our department is concerned that your company recently disclosed that it plans to purchase 14251331 yuan of the registered capital of Guangdong Guangdonghectechnologyholdingco.Ltd(600673) Pharmaceutical Co., Ltd. (hereinafter referred to as Guangzhou Pharmaceutical) held by the controlling shareholder Shenzhen Guangdonghectechnologyholdingco.Ltd(600673) Industrial Development Co., Ltd. (hereinafter referred to as Shenzhen Guangdonghectechnologyholdingco.Ltd(600673) industry) with 910 million yuan, accounting for 5.0966% of the equity of Guangzhou Pharmaceutical. This transaction constitutes a connected transaction, which is an arrangement for the listed company to exercise the acquisition option, and aims to ensure that the listed company shares the potential benefits of the possible listing of Guangyao in the future. For this equity transaction, according to article 13.1.1 of the stock listing rules, your company is requested to further disclose the following information. In the early stage, the company disclosed the draft of major asset sale and reorganization. The listed company plans to sell 226200000 domestic shares of Yichang Guangdonghectechnologyholdingco.Ltd(600673) Changjiang Pharmaceutical Co., Ltd. (hereinafter referred to as Guangdonghectechnologyholdingco.Ltd(600673) pharmaceutical) to Guangyao and sell 226200000 “fully circulating” H shares of Guangdonghectechnologyholdingco.Ltd(600673) pharmaceutical to Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) Sales Co., Ltd., a wholly-owned subsidiary of Guangyao. After the completion of the transaction, the controlling shareholder of Guangdonghectechnologyholdingco.Ltd(600673) pharmaceutical was changed from the listed company to Yichang Guangdonghectechnologyholdingco.Ltd(600673) pharmaceutical research and Development Co., Ltd., and the actual controllers were Zhang yushuai and Guo Meilan. In order to protect the interests of the listed company, Shenzhen Guangdonghectechnologyholdingco.Ltd(600673) industry promises that Guangdonghectechnologyholdingco.Ltd(600673) has the right to request the company to purchase the registered capital of Guangyao 14251311 yuan held by the company and / or other parties designated by the company after all the underlying assets of the reorganization are delivered and registered in the name of the counterparty. The commitment is valid until the date when Guangyao is restructured into a joint-stock company. Shenzhen Guangdonghectechnologyholdingco.Ltd(600673) industry will notify the listed company of Guangyao’s restructuring no later than 3 months before the date when Guangyao is restructured into a joint-stock company (subject to the change registration date of the market supervision and administration department), and the listed company has the option of acquisition. According to the announcement on the progress of major asset restructuring and sale disclosed by the company on February 22, the delivery date of the restructuring is December 29, 2021. As of the disclosure date of the announcement, all domestic shares of the underlying assets have been delivered, and Guangyao still has 919 million yuan of consideration unpaid; Among the “full circulation” shares of H shares of the underlying assets, 111901200 shares have been delivered, and the corresponding transaction price is about 921 million yuan.
1、 The company is requested to make a supplementary disclosure: in the case that all the underlying assets of this reorganization have not been delivered and registered in the name of the counterparty, the listed company will consider whether the exercise of the acquisition option meets the above commitments and whether there is a legal risk of failure to exercise. Please comment on the financial advisor of major asset restructuring.
[reply]:
(I) delivery and transfer of underlying assets
On December 29, 2021, based on the conditions agreed in the major asset sale agreement related to the reorganization of listed companies reached by the counterparties of major asset reorganization in 2021 (hereinafter referred to as “reorganization”), Guangyao and Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) the listed company signed the memorandum of sale and delivery of major assets with Guangyao and Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) and completed the delivery of all the underlying assets. According to the memorandum on the sale and delivery of major assets, the listed company, Guangzhou Pharmaceutical and Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) confirmed that from the delivery date, the rights, obligations and risk income of the underlying assets were transferred to Guangzhou Pharmaceutical and Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) respectively, including but not limited to the rights and interests such as share voting rights, profit distribution rights and nomination rights corresponding to the underlying assets, as well as all relevant legal obligations and responsibilities, which were completely transferred to Guangzhou Pharmaceutical and Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) respectively Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) enjoys or undertakes. As of the date of issuance of this verification opinion, the transfer registration of 226200000 domestic shares and 114298800 “fully circulating” H shares in the underlying assets has been completed, and the transfer of the remaining 111901200 “fully circulating” H shares has not been registered.
(II) the listed company’s current deliberation and decision to exercise the acquisition option does not violate the relevant commitments
When the listed company prepares to sell 51.41% equity of Guangdonghectechnologyholdingco.Ltd(600673) pharmaceutical to Guangzhou Pharmaceutical in 2021, in order to prevent the listed company from losing the right to indirectly enjoy the future potential income of Guangzhou Pharmaceutical due to the stripping of Guangdonghectechnologyholdingco.Ltd(600673) pharmaceutical, Shendong, the controlling shareholder of the listed company, issued a commitment that after all the underlying assets of the reorganization are delivered and registered in the name of the counterparty, The listed company has the right to buy back the registered capital of Guangyao 14251331 yuan (hereinafter referred to as “corresponding equity of Guangyao”) from shendongshi or a third party designated by shendongshi. As of the date of issuance of this verification opinion, the delivery of the reorganization has been completed, and some shares have not been registered, but the acquisition option is a right rather than an obligation owned by the listed company. With the consent of Shendong, the listed company has the right to exercise the option at any time. Therefore, the current deliberation and decision on the exercise of the acquisition option does not violate the relevant commitments.
(III) there is no legal risk of failure to exercise rights
In this transaction, the corresponding equity of Guangyao to be acquired by the listed company is now held by Shendong. Shendong has realized holding the registered capital of Guangyao of 19021098 yuan. These equity have not been pledged and meet the trading conditions.
Guangyao has completed the internal review procedures, and other shareholders agree to the acquisition and give up the preemptive right. Therefore, there is no legal risk that listed companies cannot exercise their rights.
(IV) verification opinions of independent financial advisor
After consulting and comparing the material assets sale agreement, the memorandum on the sale and delivery of material assets, the commitments related to the reorganization, the payment of the reorganization price and the registration of ownership transfer, the independent financial adviser believes that according to the commitments issued by shendongshi in the previous reorganization, the listed company has the right to buy back the corresponding equity of Guangyao from shendongshi or a third party designated by shendongshi after all the underlying assets of the reorganization are delivered and registered in the name of the counterparty. The acquisition option of a listed company is a right rather than an obligation owned by the listed company. With the consent of Shenzhen Dongshi, the listed company has the right to exercise the option at any time. The current deliberation and decision on the exercise of the acquisition option is in line with the relevant commitments. Shendongshi holds the corresponding equity of Guangyao, which has not been pledged, and Guangyao has completed the internal review procedures. Other shareholders agree to the acquisition and give up the preemptive right. There is no legal obstacle for the listed company to exercise its rights.
2、 Considering the uncertainty of Guangyao’s restructuring and subsequent application for listing, the exercise time of acquisition option is related to the interests of listed companies. The company is requested to verify and supplement the disclosure:
(1) Specific arrangements, actual progress, possible obstacles and risks of Guangyao’s restructuring and subsequent application for listing; (2) In combination with question (1), fully explain the specific reasons and rationality of deciding whether to exercise the acquisition right within 3 months before the current rather than the target restructuring, whether there is great uncertainty in the follow-up related process, and whether early decision may be detrimental to safeguarding the interests of listed companies. The financial advisor of major asset restructuring is invited to express opinions on question (1), and the independent directors of the company are invited to express opinions on question (1) (2).
[reply]:
(I) specific arrangements, actual progress, possible obstacles and risks of Guangyao’s restructuring and subsequent application for listing
Guangzhou Pharmaceutical has issued a statement on the restructuring and subsequent application for listing to the listed company. According to the above description, in terms of restructuring, Guangyao plans to implement joint-stock reform around June 2022. At present, intermediaries have been selected to assist it in restructuring, and the restructuring related work is in orderly preparation. In terms of follow-up application for listing, Guangyao plans to choose an opportunity to apply for listing according to the capital market situation around 2023, and relevant intermediaries have begun to assist Guangyao in preparing for listing in accordance with the relevant requirements of listing. Guangyao has not found any major obstacles to the restructuring and subsequent application for listing, but whether Guangyao can eventually restructure and list as planned is still affected by the capital market environment and the enterprise’s own development, and its process is uncertain. Meanwhile, shendongshi, the counterparty of this transaction, has issued a letter of commitment to provide reasonable guarantee measures for listed companies on the restructuring process of Guangyao. For details, please refer to the relevant contents of question 3 / (III) of the verification opinions.
(II) verification opinions of independent financial advisor
After consulting the explanation letter of Guangyao, the commitment letter issued by shendongshi, the capital operation planning documents of Guangyao and interviewing the relevant principals of Guangyao, the independent financial consultant believes that Guangyao has formulated a plan, plans to implement the joint-stock restructuring around June 2022, and plans to choose an opportunity to apply for listing according to the capital market situation around 2023, and the relevant work is in progress. Guangyao has not found any major obstacles to the restructuring and subsequent application for listing, but whether it can eventually be restructured and listed as planned is still affected by the capital market environment and the enterprise’s own development, and there is some uncertainty in its process. Shendong, the counterparty of this transaction, has issued a letter of commitment, which provides safeguard measures for the listed company on the restructuring process of Guangyao.
3、 Within 30 days after the equity transfer of the listed company is completed, all the equity shall be remitted to the account of the listed company in accordance with the agreement. Please explain the following in combination with the arrangement of major asset restructuring and sale agreement in the early stage:
(1) Whether the current progress of the restructuring transaction is in line with the agreement, the reasons and rationality for the completion of the delivery of some domestic shares but not the payment of all the consideration, and whether it has damaged the interests of the listed company; (2) Whether the specific arrangement and expected completion time of subsequent restructuring share delivery and consideration payment comply with the provisions of the major asset restructuring and sale agreement; (3) Whether the equity transfer price may be paid before the restructuring transfer price. If so, please explain the reason and rationality of exercising the acquisition option and paying the transaction consideration to the related parties when the listed company has not received the restructuring transfer price of the related parties in full. The financial advisor of the company’s restructuring is invited to express opinions on the above issues one by one.
[reply]:
(I) whether the current progress of the restructuring transaction is in line with the agreement, the reasons and rationality for the completion of the delivery of some domestic shares but not the payment of all the consideration, and whether it has damaged the interests of the listed company.
1. At present, the progress of the restructuring transaction is in line with the agreement
According to the agreement on sale of major assets signed by the listed company, Guangzhou Pharmaceutical and Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) on restructuring, Guangzhou Pharmaceutical and Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) shall pay the listed company a total transaction amount of not less than 50% of the total transaction price of the underlying assets no later than the delivery date (including the delivery date), that is, a total payment of not less than the equivalent of 1861395000 yuan (or the equivalent of 1861395000 yuan calculated according to the exchange rate agreed in the agreement). The remaining transaction consideration (if any) shall be paid within 6 months after the delivery date. In addition to the payment of the remaining transaction consideration, Guangyao and / or Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) shall calculate the interest paid to the listed company for the corresponding period at the interest rate of 0.02% per day from the delivery date (excluding the date) to the actual payment date (including the date), and the interest shall be borne and paid by Guangyao. The date on which the transfer registration of the underlying assets is completed shall not be earlier than the delivery date.
In addition to the above arrangements for the overall payment and transfer methods, the specific arrangements for the domestic shares and the “fully tradable” shares of H shares in the underlying assets are as follows: (1) the listed company shall submit an application for the registration of the transfer of domestic shares to the Shenzhen Branch of China Securities Depository and clearing corporation limited within 3 working days from the date when Guangyao pays no less than 50% of the transaction consideration of the domestic shares, The listed company and Guangzhou Pharmaceutical shall try their best to cooperate in completing the transfer registration of domestic shares; (2) The listed company and Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) shall make payment and transfer registration for the “fully tradable” shares of H shares in accordance with the operating procedure rules and general rules of the Hong Kong stock exchange.
Up to now, the progress of this restructuring transaction has been in line with the above agreements. The details are as follows:
As of December 29, 2021, Guangyao has paid 932.14 million yuan (no less than 50% of the transaction consideration of domestic shares) to the company in accordance with the agreement on the sale of major assets. Based on this, the listed company completed the transfer registration of domestic shares on December 29, 2021.
As of December 29, 2021, Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) has paid HK $1146416964 (no less than 50% of the transaction consideration of the “fully tradable” shares of H shares) to the company in accordance with the agreement on the sale of major assets and the operating procedures and general rules of the Hong Kong stock exchange, and 114298800 shares of the “fully tradable” shares of H shares have been transferred and registered under the name of Hong Kong Guangdonghectechnologyholdingco.Ltd(600673) in accordance with the agreement on the sale of major assets.
On December 29, 2021, the company signed the memorandum of material assets delivery with Guangyao, and the sale of assets of Guangyao was determined as the condition of the material assets delivery in Hong Kong.
On December 31, 2021, Guangyao paid 10 million yuan to the listed company for the transfer of part of the equity of domestic shares.
2. The delivery and price payment progress of domestic shares comply with the agreement, which is reasonable and does not damage the interests of the listed company
As mentioned above, as of December 29, 2021, Guangyao has paid 932.14 million yuan to the company in accordance with the agreement on the sale of major assets
