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Just completed a Chinese-funded company's largest acquisition of German companies. Zheng Xufeng proudly attended the listing ceremony of the company's acquisition of the Shandong Heavy Industry Group Chairman, Weichai Power Chairman and Chief Executive Tan Xuguang, but in the domestic annoyance. The heavy-duty gold industrial chain that Weichai Power is in charge of for many years has been severely challenged because Shaanxi Automobile Group’s plan for a backdoor listing.
Recently, the three-month suspension of Broadcom shares announced the restructuring plan, officially unveiled the veil of the Shaanqi Group's listing plan. Pursuant to this plan, Broadcom will acquire 100% equity in Shaanxi Automobile Group through asset replacement and private placement. After the transaction is completed, Shaanxi Automobile Group will implement backdoor listing.
What is more, the current Shaanxi Automobile Group's best-quality assets are not in the hands of Shaanxi Auto Group. Weichai Power holds a 51% stake in Shaanxi Zhongqi as its controlling shareholder. Over the years, there have been numerous rounds of infighting between Shaanqi Group and the local government behind it and Weichai Power.
Regarding the issue of the ownership of Shah Heavy Industries after the listing of Shaanxi Automobile Group, Broadcom shares are not clear in the restructuring plan. Both the Shaanxi Automobile Group and Weichai Power remain silent. However, taking Shaanxi Auto Group's listing as an opportunity to promote Shaanqi Power's equity changes is a goal that Shaanqi Group and Shaanxi SASAC have been painstakingly planning in recent years.
Sources close to Shaanxi Heavy Duty Truck and Shaanxi Automobile Group also said: "If SAC's assets cannot be incorporated into the statement, the listing of Shaanxi Automobile Group will not make much sense."
In view of the important position of Shaanxi Heavy Duty Truck in Weichai Power's "golden industrial chain," Weichai Power's controlling stake in Shaanxi Heavy Duty Truck will not easily let go.
Next, foreign investors intending to create a high-quality industrial chain through capital integration and local governments wishing to independently develop the local auto industry will each take a step back and continue to fight. It will be a local government interested in developing the local auto industry. Auto companies that have expanded their footprint through asset restructuring provide different samples and inspirations.
Shaanxi Auto "backdoor"
On the evening of July 31st, Broadcom shares suspended for nearly three months issued an asset restructuring plan, and plans to complete asset replacement with Shaanxi Automobile Group through a combination of asset replacement and asset issuance through the issuance of shares. If the reorganization plan is approved by the China Securities Regulatory Commission, Shaanxi The Auto Group will make a listing through the Broadcom shares.
Broadcom is a high-tech company subordinate to Xi'an Jiaotong University. The original main business was information technology. However, due to poor development, it suffered continuous losses in 2008-2010 and was suspended from listing in May 2011. Under the Shaanxi Province SASAC's arrangement, Shaanxi Automobile Group provided relief and Broadcom shares resumed listing in 2012.
As the leading automobile company in Shaanxi Province, Shaanxi Automobile Group has always been highly hoped by the local government. The government not only supports its reorganization of provincial automobile resources, but also supports the expansion of mini-vehicles, passenger cars, and special-purpose vehicles in addition to the original heavy-duty truck business. .
Listing is also a major goal of the local government for Shaanxi Automobile Group. According to Shaanxi Provincial Automobile Group's actual controller Shaanxi Provincial SASAC's plan, Shaanxi Automobile Group will achieve overall listing by the end of 2013. The poorly-developed Broadcom shares are the “crust resources†that the local government has drawn for the listing of Shaanxi Automobile Group.
People close to Shaanxi Automobile Group and Shaanxi Heavy-Duty Gas introduced that the local government has vigorously promoted the listing of Shaanxi Automobile Group. In addition to obtaining a financing platform, there is another layer of purpose. It is to take the opportunity of listing to promote the change in Shaanqiu Group’s stock rights, so that Shaanxi Automobile Group will regain control. Shaanxi Zhongqi's controlling stake, "Let Shaanxi Heavy Gas from the management to the equity level of ownership, have the final say by the local."
In the reorganization plan, Broadcom has placed special emphasis on the fact that after the reorganization, the Shaanxi Automobile Group has the risk of not having independent control over the main investment assets. If there is any fluctuation in the performance of Shaanxi Heavy Industry, it will also have a significant impact on Shaanxi Automobile's net profit. At the same time, Shaanxi Zhongqi's profit distribution plan and cash dividend level will directly affect Shaanxi Automobile's cash dividend ability.
The Shaanqi Group, which is referred to in the Broadcom Shares Restructuring Plan, is mainly invested in assets, referring to Shaanxi Heavy Gas. There are more than 20 controlling and joint-stock companies and assets of hundreds of millions of Shaanxi Automobile Group, its assets are the only one. According to public information, more than 80% of Shaanxi Automobile Group's assets come from Shaanxi Heavy Gas.
In 2001, the Delong Department established its joint ventures with Shaanxi Gear Factory and Shaanxi Automobile Group respectively through its subsidiary Torch, Shaanxi Fast Automobile and Shaanxi Heavy Gas. The Hunan Torch holds 51% shares in the two joint ventures. .
In 2005, the Delong series crashed. Weichai Power beat rivals such as Wanxiang Group with a price of 1.02 billion yuan, and successfully included the assets of Delong, such as Shaanxi Heavy Duty Truck, Hande Axle, and Fast Transmission. "Heavy card "gearbox + engine + axle + vehicle manufacturing" heavy truck "golden industrial chain."
However, the Weichai Power and Shaanxi Auto and the local governments behind it quickly developed frictions. Unlike the previous DeLong Department, which only satisfies the role of strategic investment and capital dividends, Weichai Power hopes to make strategic decisions in Shaanxi Auto. There is more participation in management and management, but Shaanxi Automobile Group and the local government hope to continue to exercise the leading power over Shaanxi Zhongqi.
In December 2006, under the leadership of the Shaanxi Provincial State Assets Supervision and Administration Commission, Shaanxi Yanchang Petroleum officially took a share in Shaanxi Auto and invested RMB 1 billion in Shaanxi Auto, trying to regain control of Shaanxi Heavy Duty Trucks through a capital increase. Weichai Power immediately followed up the investment. Only did not lose control of Shaanxi Heavy Gas.
In 2007, the board of directors of Weichai Power adopted the proposal to administer Zhang Yupu of Shaanxi Zhongqi and David Li as the chief executive officer of the company, hoping to transfer them from Xi’an to Weifang, and then appoint new management to Shaanxi Zhongqi and Fast. However, the two eventually stayed in Xi'an to maintain their original positions.
After years of infighting, Weichai Power has still not been able to get involved in the operation and management of Shaanxi Heavy Duty Truck and Shaanxi Fast, and the actual operation and management rights of the two companies are still firmly controlled by the Shaanxi Party, but in terms of the controlling rights of the two companies, Chai is also unable to give way.
Forced Palace or Armistice
According to sources from the securities industry, if Shaanxi Zaoz Assets cannot be integrated into Shaanxi Automobile Group, its backdoor listing plan will be difficult to obtain approval from the Securities and Futures Commission. The phenomenon of one-infant baby of “a maidservant husband†is rarely seen in the domestic A-share market. Under the current environment of tighter supervision of listing, Shaanxi Automobile is listed on the backdoor in the case of doubtful injection of major assets. It is very difficult to pass approval for approval. Big.
According to the sources mentioned above, if Shaanqi's assets are not incorporated into the list of listed companies, Shaanqi Group’s listing will not be of much significance, and it is believed that “Shaanxi CNPC's controlling stakes will not end here.â€
In response, the person in charge of the Securities Department of Shaanxi Automobile Group refused to answer positively because it was unable to answer sensitive questions in the critical period of being listed.
Silence has also been the consistent attitude of Weichai Power for Shaanqi Power Group's equity disputes over the years. The Economic Observer reporter contacted several digital executives of Weichai Power and Dai Lixin of the Board of Directors, but no response was received.
National Securities Auto Industry analyst Cao He believes that from the situation of Broadcom’s public release of the restructuring plan, the Shaanxi SASAC has a certain degree of certainty. The two parties have already reached a certain compromise before negotiating. “The time before the announcement of Broadcom's restructuring plan has been delayed. It's because several parties have been negotiating and the key issues are very different."
Regarding Shaanqi Group’s equity disposal after Shaanqi Group’s listing, Cao He believes that there are two possibilities: First, to maintain the status quo. Shawoil Assets is not included in the Shaanxi Automobile Group’s report and is only reflected as an investment income, but this program is The local government of Shaanxi and Shaanxi Automobile Group have too big plans and the possibility is low. Second, Shaanxi Automobile Co., Ltd. dilutes the equity of Weichai Power through multiple methods after listing, and regains the controlling share of Shaanxi Heavy Industries and Machinery, but in view of the fact that Shaanxi Heavy Gas is The most important part of Weichai Power Heavy Truck's “Golden Industry Chain†is that Weichai Power will not easily let go and the price will be high.
Xia Shu, an automotive industry commentator, believes that Weichai Power will not loosen up its control over Shaanxi Automobile. "Weichai Power has shareholders in Hong Kong. These people have rich experience in capital operations. No matter what Shaanxi Automobile Group wants to pass after it is listed, The way to compete for control, Weichai Power will have targeted measures."
In Xia Shu’s view, the future will be a critical moment to test the commercial wisdom of Shaanxi local government and Shaanxi Auto Group. If we insist on seizing the control rights of Shaanxi Auto, we are bound to affect the development of Shaanxi Heavy Industry. “The rapid growth period of the heavy truck industry has passed. Heavy truck leading companies China National Heavy Duty Truck, Dongfeng and Foton are all preparing for a new round of industrial upgrading through joint ventures. Jianghuai, which is ranked behind Shaanxi Zhongqi, is also conducting joint ventures and technical cooperation, except that Shaanxi Heavy Industries has no action."
However, in the long run, if the integration effect of Weichai Power's gold industry chain has not been satisfactory, adjustments are also possible. As major heavy truck companies have been producing engines through joint ventures in recent years, Weichai Power's business in the engine sector has also been declining in recent years. Its market share has fallen from 40% in 2010 to 32% in 2012.
In fact, Weichai Power has begun to look for new opportunities for development. Last year, Weichai Power spent a huge sum of money to acquire a 25% stake in KION, the world's second-largest forklift manufacturer. This year it further increased its capital to obtain a 30% stake, becoming its major shareholder and promoting the company’s listing in Germany.