*St Jinzhou’s termination of asset restructuring: 500 million M & A targets exposed as “running away”

On the evening of 26, * ST Jinzhou (formerly Jinzhou Cihang) announced the termination of major asset restructuring, saying that the 40th meeting of the eighth board of directors was held on October 24, and the “proposal on terminating the major asset restructuring of youshengteng” was deliberated and passed. < p > < p > * ST Jinzhou said that recently, the media reported that the operation of Yousheng Tengfei was in trouble. Based on the written reply of Yousheng Tengfei and the company’s understanding, the actual operation situation of Yousheng Tengfei is uncertain and tends to deteriorate. In view of this, it is decided to terminate the restructuring of youshengteng. < p > < p > on the evening of May 25 this year, * ST Jinzhou issued a suggestive announcement on the signing of the equity acquisition intention agreement for major asset restructuring, saying that it plans to purchase 100% equity of youshengtengfei (Beijing youshengtengfei Information Technology Co., Ltd.) held by Chen Hao with its own cash of no more than 500 million yuan (including self financing). Yousheng Tengfei owns a wholly-owned subsidiary, Beijing Yousheng brilliant Education Technology Co., Ltd., which is an education and training institution called “Yousheng education”. It mainly deals with extracurricular counseling programs for students aged 3-18 years. < p > < p > according to the announcement, youshengtengfei was established in June 2011 (7 years later than Yousheng Education), with a registered capital of 5 million yuan. Chen Hao holds 85% of the shares and is the largest shareholder. From 2017 to 2019, the total assets increased from 251 million yuan to 514 million yuan, the total liabilities increased from 357 million yuan to 509 million yuan, and the after tax net profits in the three years were 38.6412 million yuan, 59.19 92 million yuan and 53.3952 million yuan, respectively. < p > < p > according to the announcement, Chen Hao and other shareholders promised that if the above acquisition is completed, youshengtengfei will achieve net profits of 20 million yuan, 70 million yuan, 100 million yuan, 140 million yuan and 170 million yuan respectively from 2020 to 2024. < / P > < p > it is worth mentioning that at that time, the audited net profit of Jinzhou Cihang was negative in the two consecutive accounting years of 2018 and 2019, and the delisting risk warning of the company’s shares was implemented since the opening of the market on April 30, and the stock abbreviation was changed from “Jinzhou Cihang” to “* ST Jinzhou”. By the end of 2019, the monetary capital of * ST Jinzhou was only 593 million yuan, of which 328 million yuan was limited, some bank accounts were frozen, and overdue short-term loans were nearly 3 billion yuan. However, as of May 25, the closing price of * ST Jinzhou stock was 0.67 yuan, which was lower than 1 yuan for eight consecutive trading days from May 14 to May 25. < / P > < p > the above issues have also attracted regulatory attention. The Shenzhen stock exchange sent a letter to * ST Jinzhou, asking for a detailed description of the fulfillment of its employment performance commitment, the commercial rationality of the transaction, and the rationality of the payment method. Since then, the Shenzhen Stock Exchange also asked * ST Jinzhou: is there a “swindle restructuring” with its trading counterparts? On the evening of June 9, * ST Jinzhou replied to the Shenzhen stock exchange that the intention agreement signed this time is only preliminary intention, and the above performance commitment expression is not binding. The specific content is subject to the formal agreement signed by both parties, and both parties will agree on the performance gambling scheme and other protection terms in the formal agreement. < p > < p > on October 20, China fund daily published a report entitled “sudden explosion of thunder! This famous education and training institution is cold: the headquarters is empty, some parents have paid 400000, there is no way to refund 》The article, said that the winning education was “out of the way”. According to the article, “some parents of students reported that one parent prepaid in advance, but the amount of money not consumed was less than 230000 yuan, but more than 100000 yuan. Some parents paid more than 400000 yuan of tuition, and there was no way to refund. One campus owes parents about 23 million. ” < / P > < p > “at the same time, some netizens reported that Yousheng education was close to bankruptcy, and some school teachers said that the company had been in arrears for half a year, and there was no place for parents to refund the tuition fees paid by parents, involving tens of millions of yuan.” < p > < p > on October 21, the Shenzhen Stock Exchange issued a letter of concern, asking * ST Jinzhou to verify and explain whether the relevant information reported by the media is true, and if so, to explain the possible impact of the above matters on the major asset restructuring. In a reply announcement released at the same time on October 26, * ST Jinzhou said that on October 23, Fang Yousheng Tengfei replied to the company’s inquiry letter. Since the beginning of the year, Yousheng education has suspended the operation of its stores in accordance with the requirements of the state and other provinces and cities for epidemic prevention and control. Due to the high rent and labor costs of Yousheng education during the suspension period, and the company failed to achieve business growth for several months under the epidemic situation, cash flow disruption occurred, leading to the failure of some stores to cancel classes and refund fees in time Parents’ rights are protected collectively. < p > < p > the independent director’s verification opinion shows that the termination of the planning of major asset restructuring is due to the uncertainty risk in the actual operation of youshengtengfei. From the perspective of safeguarding the interests of all shareholders and the company, it is in line with the interests of the company and all shareholders to terminate this major asset restructuring. < / P > < p > in addition, * ST Jinzhou also said that since this major asset restructuring has not been submitted to the company’s general meeting for deliberation, the transaction plan has not officially come into effect. After the termination of the transaction, the company negotiated with the trading party and other parties to sign the relevant agreements to terminate the restructuring, and there is no need to bear the liability for breach of contract. At the same time, according to relevant regulations, * ST Jinzhou promised not to plan any major asset restructuring within at least one month. < / P > < p > Disclaimer: the purpose of this article reprinted by china.com finance and economics is to convey more information and does not represent the views and positions of the website. The content of this paper is for reference only and does not constitute investment advice. Investors operate accordingly and bear their own risks. < p > < p > Chinanet is a national key news website under the leadership of the Information Office of the State Council and managed by China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website releases information 24 hours a day, which is an important window for China to carry out international communication and information exchange.