Shandong Ruyi 5 Billion Reorganization Abacus Failed

In February 13th, Shandong Ruyi announcement announced the termination of a major asset restructuring plan, and the market was expected to fail. The restructuring, which started in July 29, 2013, has been very promising. Some investors believed that the actual controller Shandong Ruyi Technology Group (hereinafter referred to as Ruyi Technology) plans to pour some of its Japanese RENOWN stake into Shandong.

But Ruyi's restructuring obviously exceeded the forecasts of market analysts. Liu Kai, Minister of Ruyi science and technology propaganda department, told the twenty-first Century economic news reporter that Ruyi science and technology plans to inject all overseas assets acquired in recent years into listed companies, including cotton fields, joint venture textile factories and joint venture garment manufacturers in Australia, Japan and the United Kingdom, where the transaction price is close to 500 million US dollars. In addition, Ruyi's related domestic cotton spinning, wool spinning and clothing assets will be injected. Involving total assets of nearly 5 billion yuan.

Only this "wishful thinking" has encountered policy restrictions. Shandong Ruyi Securities Affairs Xu Changrui, the representative, said: "according to the provisions of the SFC on the reorganization of major assets, the form of backdoor listing must be operated under the control of the injection party for three years."

Most of the above foreign assets were acquired in 2013 by the acquisition of Ruyi technology. Therefore, people familiar with the matter said: "Shandong Ruyi has submitted applications to the regulatory authorities for many times, and hopes to apply for approval in the light of the fact that it is heavier than form. After repeated studies, the regulatory authorities refused the application. The above sources said: "restructuring will still take place, and there may be new plans for the year."

　　 Restructuring obstacles

Qiu Yat Fu was not the actual controller of Shandong's willingness, so asset injection encountered problems.

Shandong Ruyi's restructuring involves two steps. First, the chairman of the company Qiu Yafu holds Shandong Ruyi, and the second step is Qiu Yau's injection of assets under control into the listed company.

In February 12th, Shandong Ruyi announced that the shareholding structure of the controlling shareholder Shandong Ruyi wool textile group had changed. Qiu Yafu holdings's Ruyi technology acquired 27.55% stake in the wool group owned by China billion group and 52.01% absolute holding wool textile group.

Prior to that, the four major shareholders of the wool textile group were Chellona Orient Asset Management Corp, China billion group, Ruyi technology and Jining SASAC. Ruyi technology's stock purchase price has not been disclosed. Shandong Ruyi secretaries office replied to reporters: the acquisition involves controlling shareholders and is not within the scope of disclosure of listed companies.

The person familiar with the matter said: "after the completion of the acquisition, Qiu Yafu will become the actual controller of the company, so that the assets he can hold will be injected into the listed company." At present, the stock exchange is being changed.

However, the second step restructuring of Shandong has not gone smoothly.

Qiu Yafu originally planned to reorganize and integrate related domestic and foreign businesses and assets such as wool spinning, cotton planting and weaving, cotton spinning and weaving, clothing manufacturing and so on, and injected into Shandong Ruyi, involving a total assets of nearly 5 billion yuan.

There are a lot of related transactions between Ruyi and Ruyi technology in Shandong. In 2012, the volume of related transactions amounted to 200 million yuan, accounting for 29% of Shandong's Ruyi sales. And Ruyi technology also owns minerals, real estate and other businesses. Therefore, Qiu yfu has always wanted to integrate all the clothing and textile businesses into Shandong, so as to realize the overall listing of textile related assets and enhance the profitability of the company.

The injection process is difficult. The above said: "the large number of assets acquired by Ruyi technology overseas involves auditing, evaluation, law and many other things, while the laws and fiscal policies of Australia, Japan and other countries are not the same, and the investigation has not been completed within the scheduled time."

More importantly, according to the decision adopted by the SFC in August 1, 2011 to amend the relevant provisions on major asset reorganization and matching financing of listed companies, the injection of assets over the total assets of listed companies is defined as the backdoor listing behavior of the listed companies whose controlling rights have changed. The requirement for assets to be operated continuously for more than 3 years has been positive and accumulated over 200 in the recent two years. 0 yuan.

Chiu Yat Fu was not the actual controller of Shandong's willingness, so asset injection encountered a problem: injection means changes in the ownership of shares, the change of assets requires 3 years of operation of assets, but overseas assets acquired by Ruyi technology are acquired in the past two years.

　　 Overseas layout

Shandong hopes that the Commission will recite the remaining issues such as "debt to equity swap" and internal staff shares, and confirm the status of the actual controller of Ruyi technology, thereby exempting the provision of "backdoor listing".

Shandong Ruyi group, one of the largest textile enterprises in China, has been known overseas for years.

In 2010, Ruyi technology acquired Japanese garment giant RENOWN Co., and subsequently increased its capital to absolute holding. In 2011, Ruyi technology bought Australia's ranoldu ranch at a price of 17 million 240 thousand US dollars, and owned a raw material base for wool spinning. In 2013, Ruyi technology acquired $96 million 229 thousand, $312 million and $26 million 150 thousand respectively for the purchase of the Australian rink company, Australia's kabi cotton field, and the New Zealand wool service company, while investing in Carlowaymill company in Scotland, extending its tentacles to the UK.

Facing this Textile and clothing In the field of transnational "whole industry chain", Shandong Ruyi can not inject it into listed companies. Liu Kai said that Shandong hopes that the Commission will recite the remaining problems such as "debt to equity swap" and internal staff shares, and confirm the status of the actual controller of Ruyi technology, thereby exempting the provision of "backdoor listing".

In 2000, Shandong Ruyi In the course of debt to equity swap, the claims of the Oriental capital management company amounted to 80 million 410 thousand yuan, of which 34 million 260 thousand yuan was converted into 16 million shares of Shandong Ruyi. In 2007, when Shandong was listed on the list of Ruyi, the eastern capital administration first realized a substantial increase in the value of claims assets. Under this stimulation, Dongzhi management established 25 similar claims "value-added" projects, and even put forward the listing target in 2008.

However, this round of debt to equity swap has left a problem of ownership structure for Shandong. Owing to the relatively high proportion of debt to equity swap, the Oriental capital management has become the real controller of Ruyi in Shandong, which makes it unable to inject assets into large quantities under the condition of maintaining the existing shareholding structure.

The reply of the Shandong economic report reporter to the office of the Ruyi board of directors in twenty-first Century showed that the SFC "understood the background of the company as a special controller of the debt to equity swap company and convened a special conference".

In accordance with the requirements of the SFC, Shandong can not plan a major asset reorganization within 6 months. However, the person familiar with the matter said: "in accordance with the provisions, re reorganization should soon begin."