Sino-Singapore Jingwei Client, September 1st (Fu Yumei) After five years, Yinlong New Energy has finally been acquired by Gree Electric. On August 31, Gree Electric announced that it will bid for 336 million shares of Yinlong New Energy through judicial auction and public bidding, and Yinlong New Energy will become its holding subsidiary.
In August 2016, Dong Mingzhu also planned to acquire a 100% stake in Yinlong New Energy for 13 billion yuan through Gree Electric, but it was rejected by the general meeting of shareholders. Later, Dong Mingzhu could only invest 1 billion yuan in Yinlong New Energy in his own name, holding 17.46% of the shares and becoming the second shareholder. Now that the deal has finally fallen, can Gree and Dong Mingzhu’s “car dream” be realized?
1.8 billion won a controlling stake
According to Gree Electric’s announcement, the Intermediate People’s Court of Zhuhai City, Guangdong Province will auction Zhuhai Yinlong Investment Holding Group Co., Ltd., Zhuhai Houming Investment Co., Ltd., Part of the equity of Yinlong New Energy held by Zhuhai Hongkai Software Technology Co., Ltd.
In the end, Gree Electric bid for 336 million shares of Yinlong New Energy at a price of approximately 1.828 billion yuan. Dong Mingzhu, the chairman of the company, signed a voting entrustment agreement with effective conditions with him. Dong Mingzhu will hold his 1.93 Yinlong New Energy. The voting rights corresponding to 100 million shares are entrusted to the company to exercise.
After the transaction is completed,Gree Electric will control the voting rights corresponding to 529 million shares of Yinlong New Energy, accounting for 47.93% of Yinlong New Energy’s total equity. Yinlong New Energy will become a holding subsidiary of Gree Electric.
Since Dong Mingzhu serves as the chairman and president of Gree Electric Appliances and holds shares of Yinlong New Energy, this transaction constitutes a connected transaction in accordance with the relevant provisions of the “Shenzhen Stock Exchange Stock Listing Rules”.
Dong Mingzhu’s “Unfinished Dream”
In fact, Gree Electric had previously tried to acquire Yinlong New Energy, but ended in failure. This time can be said to be “continuing the front edge.” As early as April 2016, Gree Electric issued an announcement saying that it was planning to issue shares to purchase assets, and the subject of the transaction was Yinlong New Energy; in August of the same year, Gree Electric officially announced the acquisition plan, intending to issue to all shareholders of Yinlong New Energy The purchase price is about 13 billion yuan.
At that time, the acquisition process was not smooth, and the Shenzhen Stock Exchange also issued a restructuring inquiry letter due to many doubts from the outside world. But the biggest resistance comes from shareholders. According to media reports, at the general meeting of shareholders, most of Gree Electric’s small and medium shareholders voted against the acquisition plan, and there was no consensus within the company. One of the reasons for the opposition is that the valuation of the acquisition is too high. Dong Mingzhu was also angry at the shareholders meeting.
Only one month later, Dong Mingzhu joined Wanda, JD.com and CIMC to increase the capital of Yinlong New Energy by 3 billion yuan. Among them, Dong Mingzhu also invested 1 billion yuan in Yinlong New Energy in his own name, accounting for 17.46% of the shares, and became the company’s second largest shareholder. It can be said that Dong Mingzhu favors Yinlong New Energy and has expressed his optimism about Yinlong New Energy on many occasions in public.
However, in 2018, Yinlong New Energy was repeatedly exposed to news about factory shutdowns and debt collection by suppliers. In November, Yinlong New Energy claimed that the major shareholder Wei Yincang and the former president Sun Guohua encroached on the company’s interests through connected transactions, involving more than 1 billion yuan. After the incident continued to ferment, Dong Mingzhu also had disagreements with Zhuhai Yinlong’s original controlling shareholder and management, and once went to court.
Gree Electric stated in the announcement that Yinlong New Energy’s financing was limited and its production capacity was not fully released due to illegal activities caused by Yinlong New Energy’s major shareholder suspected of encroaching on the company’s interests, and losses occurred in the past two years.
The announcement shows that in 2020, Yinlong New Energy’s total revenue will be 4.325 billion yuan, and a net profit loss of 688 million yuan; from January to July 2021, total revenue will be 1.058 billion yuan and a net profit loss of 763 million yuan, exceeding last year. The total amount of losses for the entire year. At the same time, as of July 31, Yinlong New Energy’s total liabilities reached 22.73 billion yuan. In the first half of this year, Gree Electric’s net profit attributable to its parent was only 9.457 billion yuan.
The Tianyan check also revealed that Yinlong has added a piece of information about the person to be executed a few days ago, with an execution target of 240 million yuan. Since the beginning of this year, Yinlong has accumulatively 6 cases of persons subject to execution.
Where is it intended?
Five years have passed, Gree Electric finally acquired Yinlong New Energy’s revenue. A fundraiser told the Sino-Singapore Jingwei Client that the amount of the acquisition was only more than one billion yuan, so this transaction does not require the approval of the shareholders meeting, as long as the board of directors approves it. Gree Electric also stated that this transaction constitutes a connected transaction, but does not constitute a major asset reorganization. This transaction does not need to be submitted to the company’s shareholders meeting for deliberation.
But why is Dong Mingzhu obsessed with Yinlong New Energy? Regarding the reasons for the acquisition, Gree Electric stated in the announcement that it is an important measure to respond to the national “dual-carbon” goal and implement the development idea of ”based on the home appliance industry and steadily expand diversified emerging businesses”.
In addition, Gree Electric said that the two parties in the transaction can gain synergy. Gree Electric can empower target companies in multiple dimensions in the areas of corporate governance, market expansion, R&D collaboration, and supply chain management, and improve their capacity utilization and product competitiveness.
On the other hand, Yinlong New Energy can also rely on its nano-scale lithium titanate technology and existing lithium battery production capacity to promote the application of Gree Electric’s energy storage-related electrical products, new energy and other sectors, and comprehensively accelerate the existing diversified The development of chemical business, and increase the market share of Gree Electric’s automotive industry products in the motor, controller and other automotive core parts industry.
According to the official website, Yinlong New Energy Co., Ltd. was established in 2008. It is a collection of core materials for lithium titanate batteries, batteries, electric motor control, charging equipment, intelligent energy storage systems, new energy vehicle R&D, production, sales and power batteries. A group that integrates recycling and echelon utilization, it owns two major brands, Guangtong Automobile and Aoti Energy Storage, and is headquartered in Zhuhai.
Pan Helin, Executive Dean of the Digital Economy Research Institute of Zhongnan University of Economics and Law, analyzed the client of Zhongxin Jingwei that for Gree, diversified businesses are needed to diversify risks, seize industry opportunities, and use diversification to cultivate ecology. On the other hand, the current new energy vehicle field is still in the industry’s explosive period, and the acquisition of Yinlong is the fastest way for Gree to intervene in the new energy vehicle field. Moreover, Gree is more familiar with Yinlong New Energy’s internal structure and situation, and the risk of mergers and acquisitions is relatively small.
Pan Helin further pointed out that Yinlong New Energy has technology, and the lithium titanate anode technology has high safety and can adapt to multiple application scenarios in reality. However, it has been slow to promote the commercialization of lithium titanate anodes. Gree also needs to make up for Yinlong’s shortcomings with its own channels, technology, and management capabilities, and help it to implement the technology to achieve commercialization and scale.
The industry generally believes that “lithium titanate” is only a niche technology, which has yet to be further tested by the market. What’s more, Yinlong New Energy’s current operating situation of successive losses makes it more difficult to promote the commercialization process by its own power. Regarding the future development direction and countermeasures, the Sino-Singapore Jingwei client contacted Yinlong New Energy, and had not received a reply as of press time.
Gree said that after the completion of this transaction, Gree Electric will become the controlling shareholder of Yinlong New Energy, and through rationalizing the governance structure, it will empower Yinlong in multiple dimensions in the fields of corporate governance, market expansion, R&D collaboration, and supply chain management. New energy, improve its capacity utilization rate and product competitiveness. However, there is a certain degree of uncertainty about whether it can be successfully realized in the future. Investors are kindly requested to pay attention to the operating risks of Yinlong New Energy. (Zhongxin Jingwei APP)Return to Sohu to see more
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