Securities code: Tong Petrotech Corp(300164) securities abbreviation: Tong Petrotech Corp(300164) Announcement No.: 2022023 Tong Petrotech Corp(300164)
Announcement on signing the equity compensation and performance commitment change agreement
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
In view of the fact that the business of Beijing Yilong Hengye Petroleum Engineering Technology Co., Ltd. (hereinafter referred to as “Yilong Hengye” or “target company”), a joint-stock subsidiary of Tong Petrotech Corp(300164) (hereinafter referred to as “Yilong Hengye” or “target company”), was seriously affected by the global epidemic in 2020, resulting in the failure to meet the performance commitments, in order to promote the stability of its management and shareholders, so as to make Yilong Hengye develop healthily in the long term, and in order to safeguard the long-term interests of the listed company and all shareholders, Upon consensus of all parties, Ding Fuqing, LV lanshun, Qin Zhongli, Tao Liangjun, Pei cunmin and Liu Peng (hereinafter referred to as “original shareholders” or “original shareholders”) of Yilong Hengye intend to compensate 12.062% of the equity of Yilong Hengye to the company, Huzhou Xianyi equity investment partnership (limited partnership) (hereinafter referred to as “Huzhou Xianyi”) and Shanghai Renhe Zhiben Energy Investment Co., Ltd. (hereinafter referred to as “Shanghai Renhe”), At the same time, the performance commitment corresponding to the uncompensated equity will be postponed for three years, that is, 65 million yuan will be realized in 20222024. After the completion of this compensation, the company will hold 376171% of Yilong Hengye shares.
This matter has been deliberated and approved at the 23rd Meeting of the 7th board of directors and the 12th meeting of the 7th board of supervisors of the company, and needs to be submitted to the general meeting of shareholders of the company for deliberation. The details are as follows:
1、 Original performance commitment
1. Tong Petrotech Corp(300164) (hereinafter referred to as “the company” or ” Tong Petrotech Corp(300164) “) held the 29th meeting of the sixth board of directors on April 18, 2018, deliberated and approved the proposal on signing the capital increase agreement and foreign investment. The company invested 30 million yuan to subscribe for the newly increased registered capital of Yilong Hengye, accounting for 5.6604% of the total share capital of the target company after the capital increase. After the capital increase, the company held 258358% equity of Yilong Hengye. The company signed the capital increase agreement with other shareholders of Yilong Hengye and Yilong Hengye, and the shareholders of Yilong Hengye Ding Fuqing, LV lanshun, Qin Zhongli, Tao Liangjun, Pei cunmin and Liu Peng (hereinafter referred to as the “original shareholders”) promised:
(1) Performance commitment indicators: the net profit of the target company in 2018, 2019 and 2020 shall not be less than 45 million yuan, 48 million yuan and 51 million yuan respectively (hereinafter referred to as “performance commitment indicators”). (2) Repurchase: since the closing date, if the target company fails to fulfill the agreed performance commitment, the original shareholder shall undertake the obligation of repurchase to Tong Petrotech Corp(300164) company.
The repurchase method is: the capital increase price shall repurchase the equity of the target company held by Tong Petrotech Corp(300164) then at the price of principal and income calculated by 10% of annual simple interest from the closing date. The specific calculation formula is:
The repurchase consideration of the original shareholder = the price of this capital increase + the price of this capital increase × 10% × (the cumulative number of days from the date of repurchase to the date of delivery of the company’s equity by the target shareholder) / 365 (the number of days of cash dividends to be distributed by the target shareholder during the period of repurchase of the company)
(3) Valuation adjustment right: if the net profit of the target company in 2018, 2019 or 2020 is lower than 95% but more than 90% of the corresponding annual performance commitment indicators agreed in this agreement, the original shareholders of the target company will make valuation compensation to Tong Petrotech Corp(300164) by transferring equity free of charge according to the relative proportion of equity held by the target company. If the net profit of the target company in the above corresponding years is lower than 90% of the performance commitment index and Tong Petrotech Corp(300164) does not choose to exercise the repurchase right, the original shareholders of the target company will compensate Tong Petrotech Corp(300164) for valuation. The valuation compensation adopts the following equity compensation or monetary compensation or the combination of equity compensation and monetary compensation. The original shareholders have the right to choose the compensation method. If the original shareholder does not choose the way of compensation, it means that all parties agree to exercise the obligation of compensation by transferring their equity of the target company free of charge.
If the compensation method is equity compensation, then: Tong Petrotech Corp(300164) the proportion of equity compensation to be obtained = (the proportion of equity obtained by this capital increase held by Tong Petrotech Corp(300164) when exercising each performance compensation) × [(performance commitment index / Yilong Hengye net profit) – 1].
Yilong Hengye achieved a net profit of -195157700 yuan in 2020. According to the above formula, the proportion of equity to be obtained this time = 5.6604% × [(51 million yuan / (- 19517700 yuan)) – 1] = – 7.1396%. Because the figure is negative, it is not in line with the original intention of the original agreement. According to the consensus of all parties, the net profit in 2020 is calculated as 0, and the proportion of equity to be obtained this time is infinite.
The equity compensation in the original agreement takes the equity of the original shareholder as the upper limit of compensation. In comprehensive consideration, the proportion to be compensated this time is the shareholding proportion of the original shareholders, that is, 32.062%.
If the compensation method is monetary compensation, then: Tong Petrotech Corp(300164) compensation amount to be obtained = Tong Petrotech Corp(300164) equity proportion to be obtained (see the above calculation formula for details) × The fair valuation of the target company’s market at the time of compensation in the current year.
(4) All parties unanimously confirm that the target company and / or the original shareholders shall fulfill the above compensation obligations of paying compensation amount and delivering compensation equity (including but not limited to completing the industrial and commercial registration procedures for equity change) to the investors within 6 months after the issuance of the annual audit report of performance commitment.
2. On August 17, 2018, the company held the 35th meeting of the sixth board of directors and deliberated and passed the proposal on foreign investment. The company invested 20 million yuan to subscribe for the new registered capital of Yilong Hengye, accounting for 2.8777% of the total share capital of the target company after the capital increase. After the capital increase, the company held 261113% equity of Yilong Hengye. The company signed the capital increase agreement with Huzhou Xianyi, Shanghai Renhe, other shareholders of Yilong Hengye and Yilong Hengye who participated in the investment at that time. The original shareholders of Yilong Hengye promised:
(1) Performance commitment indicators: the net profit of the target company in 2018, 2019 and 2020 shall not be less than 57.5 million yuan, 67.5 million yuan and 77.5 million yuan respectively (hereinafter referred to as “performance commitment indicators”). (2) Repurchase: since the closing date, if the target company fails to complete any performance commitment agreed in the agreement, the original shareholder shall undertake the repurchase obligation to the investor.
The repurchase method is: the capital increase price will repurchase the equity of the target company held by the investor at the price of the principal and income calculated at 10% of the annualized simple interest from the closing date. The specific calculation formula is:
The repurchase consideration of the original shareholders = the actual capital increase price + the actual capital increase price × 10% × (the number of days from the delivery date of this capital increase to the repurchase date) / 365) – the cumulative amount of cash dividends distributed by the target company obtained by the investor during the period of being a shareholder of the target company
(3) Valuation adjustment right: all parties agree that if the net profit of the target company in 2018, 2019 or 2020 is lower than 90% of the corresponding annual performance commitment indicators agreed in this agreement, and the investor does not choose to exercise the repurchase right, the original shareholder of the target company will make valuation compensation to the investor.
The valuation compensation adopts the following equity compensation or monetary compensation or the combination of equity compensation and monetary compensation. The original shareholders have the right to choose the compensation method. If the original shareholder does not choose the way of compensation, it means that all parties agree to exercise the obligation of compensation by transferring their corresponding equity of the target company to the investors free of charge.
If the compensation method is equity compensation, then: the proportion of equity compensation to be obtained by the investor = (the proportion of equity obtained by this capital increase held by the investor when exercising each performance compensation) × [(performance commitment index / net profit of Yilong Hengye in trigger compensation year) – 1].
Yilong Hengye achieved a net profit of -195157700 yuan in 2020. According to the above formula, the proportion of equity to be obtained by the investor this time = 100719% × [(77.5 million yuan / (- 19517700 yuan)) – 1] = – 140716%. Because the figure is negative, it is not in line with the original intention of the original agreement. According to the consensus of all parties, the net profit in 2020 is calculated as 0, and the proportion of equity to be obtained this time is infinite.
The equity compensation in the original agreement takes the equity of the original shareholder as the upper limit of compensation. In comprehensive consideration, the proportion to be compensated this time is the shareholding proportion of the original shareholders, that is, 32.062%.
If the compensation method is monetary compensation, then: the cash compensation to be received by the investor = the capital increase price paid by the investor for subscribing for this capital increase × [1 – (trigger compensation year Yilong Hengye net profit / performance commitment index)].
According to the above formula, the investor shall receive cash compensation = 70 million yuan × [1 – (- 195157700 yuan / 77.5 million yuan)] = 246271500 yuan.
(4) All parties unanimously confirm that if the investor does not choose to exercise the repurchase right, the target company and / or the original shareholders shall fulfill the above compensation obligations of paying compensation amount and delivering compensation equity (including but not limited to completing the industrial and commercial registration procedures for equity change) to the investor within 6 months after the issuance of the annual audit report of performance commitment.
3. On April 29, 2019, the company held the 47th meeting of the sixth board of directors and deliberated and passed the proposal on foreign investment. The company invested 20 million yuan to subscribe for the unpaid capital contribution of Huzhou Xianyi. The company directly paid to Yilong Hengye, accounting for 2.8777% of the total share capital of the target company after payment. After the capital increase, the company held 28.989% of the equity of Yilong Hengye. The company signed the equity transfer agreement with Huzhou Xianyi and Yilong Hengye, and the performance commitment and compensation obligation of the original shareholders of Yilong Hengye to Huzhou Xianyi were immediately transferred to the company. The relevant terms of performance commitment and compensation were consistent with the capital increase agreement disclosed and signed on August 17, 2018.
2、 Achievement of performance commitments
Yilong Hengye achieved a net profit of 519344 million yuan in 2018 and 610136 million yuan in 2019, both of which have achieved their performance commitments. In 2020, Yilong Hengye’s income fell sharply due to the global epidemic. According to the audit report No. [2021] 03110695 issued by Asia Pacific (Group) accounting firm (special general partnership) on October 20, 2021, Yilong Hengye’s net profit in 2020 was -19515767856 yuan, which was lower than 90% of the promised net profit of 51 million yuan in April 2018, i.e. 48.9 million yuan, At the same time, it is lower than 90% of the promised net profit of 77.5 million yuan in August 2018, that is, 69.75 million yuan. Therefore, Yilong Hengye failed to achieve its performance commitment in 2020. According to the above agreement, the original shareholders of Yilong Hengye need to compensate all equity to the investors.
3、 Reasons for performance compensation and performance commitment change
1. Before the outbreak, Yilong Hengye’s performance continued to grow.
The company began to participate in Yilong Hengye in 2016. At that time, Yilong Hengye formed a technical service sector integrating drilling and completion. Its business has spread across major oil and gas basins in China, especially overseas business, and formed an international business network for major international oil producing areas such as the Middle East and Central Asia. The company has strong business relevance with Yilong Hengye. At the same time, the company has established three strategic directions: Tongyuan North America (with shale oil and gas development technology in North America as the core), Tongyuan China (with integrated drilling and completion business in China as the core) and Tongyuan overseas (with conventional oil and gas enrichment area development business as the core). Tongyuan overseas refers to overseas business outside North America, Therefore, investing in Yilong Hengye can further enrich the company’s business layout and form synergy. Since investing in Yilong Hengye, Yilong Hengye has undertaken the important task of the company’s overseas strategy. In terms of market, Yilong Hengye is mainly engaged in overseas markets, distributed in Algeria, Kazakhstan, Iraq and other overseas regions. In terms of business, Yilong Hengye’s business includes drilling and completion integrated technical services, which forms a complementary effect with the company’s existing business and is the main part of the company’s three strategic directions.
Since the company’s equity participation in 2016, Yilong Hengye’s performance has increased year by year. In 2019, Yilong Hengye achieved a revenue of 5703045 million yuan and a net profit of 610136 million yuan, with good performance.
Year 20162017 20182019
Income (10000 yuan) 2562662314096536040775703045
Net profit (10000 yuan) 422546428463519344610136
2. The epidemic situation in 2020 had a serious impact on the business development of Yilong Hengye, and the overseas business recovered slowly in 2021.
In 2020, covid-19 epidemic spread all over the world. Countries around the world took measures such as border blockade and travel restrictions. Economic activities all over the world were seriously suspended, oil and gas demand decreased and prices plummeted, resulting in the suspension of Yilong Hengye’s overseas business orders. At the same time, the epidemic affected the decline of investment and workload, including Ukraine, Peru, Algeria, Kazakhstan The suspension of relevant projects in Iraq and other countries ranged from March to September, resulting in a sharp decline in the performance of Yilong Hengye. In 2020, affected by the global epidemic, Yilong Hengye’s revenue fell sharply, realizing an operating revenue of 3208778 million yuan, a year-on-year decrease of 43.74%; In the case of loss of main business, Yilong Hengye also made provision for impairment of fixed assets in accordance with accounting standards, realized a net profit of -195157700 yuan, and made a significant loss in performance. Therefore, the performance commitment of Yilong Hengye in 2020 has not been completed. In 2021, with the continuous promotion of global covid-19 vaccination, the economic activities of major economies in the world gradually recovered, and the oil and gas industry rebounded and recovered. Yilong Hengye’s overseas business has also been slowly recovering since the beginning of 2021. However, Algeria, Kazakhstan, Iraq and other countries where Yilong Hengye’s business is located belong to the third world countries with weak economic strength and are greatly affected by the epidemic
