September 13, 2:30 pm, Henglong Building Top Floor Conference Room.
When Zhao Chen received the meeting notice yesterday, he asked Liu Mingyu to notify all shareholders that Board of Directors would hold the meeting this afternoon.
Since we don't know when the government meeting will end, Board of Directors doesn't have a specific time.
Just let everyone wait after they arrive.
When he and Shen Jue returned to Henglong, all the directors were present.
Without any rest, the first connection enters Meeting Room.
Board of Directors's rhythm is faster than imagined.
Liu Mingyu presided over the meeting. As soon as he finished his opening remarks, Chen Xi distributed the due diligence report of Haoyu Construction to everyone present.
Song Zhongping flipped through a few pages, raised his head and asked:
"Chairman Zhao, this Chen Wei, is it reliable?"
Zhao Chen nodded:
"We checked the projects she handled, and there is no problem with her ability. Moreover, there will be strict binding clauses in the agreement, and she will not be able to escape."
Song Zhongping didn't ask again.
Sun Zhengping pushed up his glasses:
"The debt ratio will rise to 62% after incorporating Off-Balance Sheet Liabilities. This number is still within a safe range. I agree."
Xu Yong looked at Shen Jue. Shen Jue leaned back on the chair without any intention of objecting.
He also nodded.
From the opening of Liu Mingyu to the unanimous approval, it took less than twenty minutes.
After the meeting, Shen Jue smiled and said to Zhao Chen:
"You Board of Directors, now you really have your say."
Zhao Chen shook his head:
"It's not just one opinion, it's that everyone has a consensus."
Shen Jue smiled and said nothing more.
Board of Directors passed, and now we are waiting for the result of Due Diligence.
After Due Diligence, if there are no major problems, you can sign the contract immediately.
Almost a week later, it will be September 20th.
This day is Wednesday. I completed Due Diligence the day before and found almost no new problems.
So Zhao Chen signed Equity Transfer Agreement on behalf of Henglong and Chen Jianye.
From this moment on, legally speaking, Haoyu Construction has become a wholly-owned subsidiary of Henglong.
After signing the contract, there was no press conference, no celebration party, and no media coverage.
Everything went on quietly.
First on September 20, at 7 pm, Henglong issued a series of announcements.
Announcements were posted quietly.
Securities code: ××××× Securities abbreviation: Henglong Shares, announcement number: 2017-089.
<Henglong Shares's announcement on the wholly-owned acquisition of Haoyu Construction>
"Our company Board of Directors is pleased to announce that on September 20, 2017, our company and Haoyu Construction Co., Ltd. (hereinafter referred to as 'Haoyu Construction') signed the Equity Transfer Agreement.
According to the agreement, the company will acquire 100% equity of Haoyu Construction in cash at a consideration of RMB 100 million."
"1. Haoyu Construction, the subject of the transaction, was established in 1995 and is mainly engaged in real estate development, construction and other businesses.
As of June 30, 2017, Haoyu Construction's audited total assets were approximately RMB 5.5 billion, total liabilities were approximately RMB 4.5 billion, and net assets were approximately RMB 1 billion.
2. Transaction consideration and payment method
The consideration for this transaction is RMB 100 million, and the payment method is as follows:
1. The acquisition payment will be paid in one lump sum one year after the completion of this transaction.
2. If Haoyu Construction encounters a major debt default or legal dispute during the transition period, the company has the right to deduct the acquisition payment accordingly or terminate this transaction.
3. Transaction purpose and impact
After the completion of this acquisition, the company will acquire 7 projects under construction under Haoyu Construction and approximately 400 acres of land reserves, with a total value of approximately RMB 5 billion.
The company plans to invest approximately 800 million to 1 billion yuan in the next three years to revitalize the above-mentioned projects, and is expected to achieve a net profit of approximately RMB 1.5 billion.
Board of Directors believes that this transaction is in line with the company's strategic development direction and will help increase the company's asset size and profitability.
This is hereby announced."
Announcement number: 2017-090.
<Henglong Group's supplementary announcement regarding the acquisition of Haoyu Construction>
"This is to make the following announcement concerning the wholly-owned acquisition of Haoyu Construction Supplementary Explanation issued on September 20, 2017:
1. Supplementary Explanation regarding the payment conditions for acquisition funds.
According to the supplementary agreement signed by the company and the original shareholder of Haoyu Construction, Mr. Chen Jianye and his daughter, Ms. Chen Wei,
In addition to meeting the conditions stated in the original announcement, the payment of 100 million yuan by RMB for this acquisition also needs to meet the following conditions:
1. Ms. Chen Wei needs to work full-time in the company for no less than five years and sign a non-compete agreement.
2. Ms. Chen Wei needs to provide personal unlimited joint liability guarantee for the existing and contingent debts of Haoyu Construction.
3. Haoyu Construction needs to complete the clearing of all existing legal disputes within one year.
4. Haoyu Construction needs to complete the share sorting work of each project within one month and provide solutions.
2. Explanation on equity incentives for Ms. Chen Wei
In order to encourage Ms. Chen Wei to play an active role in the integration process of Haoyu Construction, the company Board of Directors approved the following equity incentive plan:
For every 10% decrease in the total liabilities assumed by Haoyu Construction on the current basis, the company will grant Ms. Chen Wei 1 million Henglong Group shares.
The above stocks will be regarded as the company's treasury shares and will be transferred to the company by the company's actual controller Mr. Zhao Chen at an agreed price.
This is hereby announced."
Announcement number: 2017-091.
<Henglong Group's announcement regarding the transfer of shares by Controlling Shareholder>
"Our company Board of Directors is pleased to announce that on September 20, 2017, our company Controlling Shareholder Mr. Zhao Chen and our company signed Share Transfer Agreement.
According to the agreement, Mr. Zhao Chen will transfer its 10 million Henglong Group shares to the company at a price of 8 Hong Kong Dollar per share."
"After the completion of this transfer, the above shares will be used as treasury shares of the company for possible future equity incentive plans.
After the transfer was completed, the shares held by Mr. Zhao Chen dropped from 370 million shares to 360 million shares, and the shareholding ratio dropped from 66.07% to 64.28%.
Mr. Zhao Chen's controlling position will not be affected."
The three announcements, like three bombs, exploded in the capital market.
<Securities Daily>News: "Henglong acquired Haoyu Construction for 100 million, and the debt ratio rose to 62%"
<21st Century Business Herald>: "Henglong acquires Haoyu: Is it bargain hunting or taking over?"
<Daily Economic News>: "Chen Wei signed a 'deed of sale', five years of service + unlimited guarantee, Zhao Chen, how harsh are these conditions?"
<Finance> Magazine: "Zhao Chen 8 Hong Kong Dollar transferred shares to Henglong, which is 10 Hong Kong Dollar lower than the market price. Is this a benefit to shareholders?"
The Snowball platform also completely exploded.
User "Value Discoverer": "Holy shit, these three announcements contain too much information!"
User "Old Leek Root": "Let me summarize first: Henglong acquired Haoyu for 100 million, but the money was not given until one year later.
Chen Wei requires a five-year service period and unlimited personal guarantee.
Zhao Chen sold his shares 8 Hong Kong Dollar to the company as treasury shares, and the market price is now 18 yuan! This is a gift to the company!"
User "Chase Rises Kill Dips for Life": "Chen Wei is not selling the company, it is selling itself."
User "Patient Holder": "Have you noticed? As for the equity incentive, every time the debt is reduced by 10%, 1 million shares will be given.
Haoyu has a debt of 4 billion. If all is paid off, she can take away all the 10 million treasury shares! According to the current stock price, it is close to 180 million!"
User "Valuation Hunter": "But the premise is that she can pay off her debts.
If the debt of 4.5 billion is reduced by 10%, it will be 450 million. Taking 1 million shares is equivalent to earning 18 million for every 400 million debt.
This level of motivation is truly something I am willing to give."
User "Pig Cycle Hunter": "The question is, can she get it? Those debts are all real gold Silver's debts."
User "Old Leek Root": "There is also the unlimited guarantee. If something goes wrong with Haoyu, she will have to pay for it for the rest of her life."
User "Chase Rises Kill Dips for Life": "Isn't this a contract to sell oneself?"
User "Patient Holder": "Someone must be willing to sign the contract of sale. Chen Wei signed it, which means she really wants this opportunity."
Soon, a hot post was pushed to the home page:
<Henglong triple strike: How loud is Zhao Chen's abacus?>
This article is clear and concise, and the analysis is clear and logical.