Under the east wind of the "six mergers and acquisitions" policy, Meijin Energy (00723. SZ) launched a major asset restructuring plan. According to the restructuring plan released by the company yesterday, the company intends to purchase the equity of three coal mines under its controlling shareholder Meijin Energy Group Co., Ltd. (hereinafter referred to as "Meijin Group") by issuing shares.
For the transaction, Meijin Energy mentioned that the purpose includes solving the problem of competition in the same industry and expanding the company's reserve advantage in scarce coking coal resources.
Titanium Media APP noticed that the underlying assets in the restructuring plan were placed before the merger and acquisition policy was loosened, and did not meet the injection conditions. At present, the two parties not only chose a lower additional issuance price, but also discounted by 20% on this basis, which shows the urgency of the two parties to promote the restructuring.
However, although the quality of the underlying assets is high-quality, Meijin Energy, which has obviously lagged behind in the first half of the year, "far water can't save near fire", after all, two of the coal mines are still under construction, and one has just achieved a turnaround. At the same time, Meijin Energy is difficult to protect itself under the high proportion of pledges, and the liquidity risk is high.
It is proposed to purchase the assets of the controlling shareholder
According to the announcement, Meijin Energy intends to purchase 51% of the shares of Linxian Jinyuan Coal Mine Co., Ltd. (hereinafter referred to as "Jinyuan Coal Mine"), 49% of the shares of Shanxi Fenxi Zhengwang Coal Industry Co., Ltd. (hereinafter referred to as "Zhengwang Coal Industry"), and 49% of the shares of Shanxi Fenxi Zhengcheng Coal Industry Co., Ltd. (hereinafter referred to as "Zhengcheng Coal Industry") through the issuance of shares, and the remaining shares of these three coal mines are all controlled by the local State-owned Assets Supervision and Administration Commission.
Since the counterparties to the sale of equity are all enterprises actually controlled by Meijin Group, the controlling shareholder of Meijin Energy, the transaction constitutes a connected transaction. The transaction price has not yet been determined.
One of the backgrounds of this connected transaction is that Meijin Energy has four existing coal mines, which has a competition problem with Meijin Group, and Meijin Group promised to solve this problem as early as 2022.
It is worth mentioning that Titanium Media APP noticed that according to Meijin Energy's statement in its reply to the inquiry letter of the Shenzhen Stock Exchange's annual report before the launch of the "Six Mergers and Acquisitions", Meijin Group "needs a lot of capital to invest in construction" before injecting relevant coal mine assets into listed companies, and obtained the "Mining License", "Safety Production License" and other licenses required by mining enterprises.
At the moment, it is clear that the counterparty has not met that condition. For example, the mining license of Jinyuan Coal Mine expired on September 30, 2022, and was not renewed in time, and it is currently being renewed.
The conditions are not sufficient, and Meijin Group is eager to sell assets to Meijin Energy, apparently intending to take advantage of the "merger and acquisition of six articles".
For Meijin Energy, the coal products produced by the above three coal mines are all high-quality coking coal, which is conducive to increasing the self-sufficiency rate of the company's high-quality coking coal and reducing the cost of coke production.
It should be noted that affected by the low price of coke, in the first half of this year, coke companies, including Meijin Energy, had a hard time, and 6 of the 7 listed coke companies lost money, of which Meijin Energy lost the most, with a net profit of -680 million yuan.
In recent years, Meijin Energy has increased its efforts to promote hydrogen energy business, but at present, more than 9% of the company's revenue still relies on coal and coke business, and its profit margin is mainly subject to the price fluctuations of raw material coking coal. According to public information, Meijin Energy's coking coal self-sufficiency rate is about 3 percent, and in combination with the company's performance, the cost advantage of its coking coal self-sufficiency is not outstanding at present.
Titanium media APP noticed that among the three target assets to be purchased by the company, Jinyuan Coal Mine and Zhengcheng Coal Industry have not yet been put into operation and operation, and only Zhengwang Coal Industry is operating normally, and it has just achieved a turnaround in the first half of this year.
The main financial data of Zhengwang Coal Industry in the last two years of the consolidated caliber, source: announcement
In addition, public information shows that Zhengcheng Coal Industry is still solving the "historical problems of infrastructure projects" in early 2024; Jinyuan Coal Mine began construction in 2018, with an original planned construction period of 55 months and a total investment of 3.8 billion, and in February 2022, the project once underwent "reconstruction and rectification". At present, it is unclear how long and capital it will take for Meijin Energy to put Zhengcheng Coal and Jinyuan Coal Mine on the right track.
The liquidity risk of the controlling shareholder is overhanged
According to the restructuring plan, the issue price negotiated by the parties to the transaction was 3.61 yuan per share, and the company selected the lowest price of the average transaction price in the 20 transactions, the first 60 trading days and the first 120 trading days before the pricing benchmark date, and on this basis, it was discounted by 20%. At present, the company's share price is hovering around 5 yuan, and as of today's close, it is 4.96 yuan per share.
It should be noted that at the time of the launch of the restructuring plan, the controlling shareholder of Meijin Energy was facing a high proportion of pledge risk.
According to the announcement, as of August 2 this year, the cumulative pledged shares of Meijin Group accounted for 99.7% of its shares, accounting for 37.93% of the company's total share capital, and before that, Meijin Group had overdue debts. According to the disclosure, the stock pledged repurchase financing business carried out by Meijin Group Group and Great Wall Guorui Securities involved an overdue financing principal balance of 1.985 billion yuan.
According to the information of Meijin Energy's reply to the inquiry letter of the Shenzhen Stock Exchange's annual report in June this year, the total amount of Meijin Group's share pledge financing is about 6.035 billion yuan, and if calculated according to the average trading price of Meijin Energy on October 9 of 5.05 yuan and the announced cumulative pledge of 1.64 billion shares, the total market value of Meijin Group's shares and the coverage rate of the total amount of share pledge financing have been reduced from 150% in June this year to 137%.
Source: Announcement
The debt risk of the controlling shareholder is high, and some skeptics believe that the current related party transaction will help reduce the risk of forced liquidation due to the continuous decline in the stock price of Meijin Energy.
It is worth mentioning that before the restructuring plan was thrown, in the face of a new round of sharp rises, Meijin Energy investors, who were eager to pay convertible bonds in advance, were once troubled. It is reported that since July this year, some convertible bond holders have asked Meijin Energy to repay in advance, the company has said that it is expected to collect the repayment agreement on August 26, and complete the repayment of funds within two and a half months after that, but until September 20, the company announced that the relevant materials have been collected, and some investors bluntly said that the company "dragged on".
According to the announcement, Meijin Energy issued 35.9 million convertible corporate bonds in 2022, with a total issuance of 3.59 billion yuan, and after several downward revisions, the conversion price was 5.26 yuan per share, higher than the current stock price, and on September 25 this year, the company said that it would not revise the conversion price downward. As of the end of June this year, the company's monetary funds were 3.68 billion yuan (restricted monetary funds of 1.928 billion yuan, mainly for margin and interest). (This article was first published in Titanium Media APP, author|Zhang Sun Mingshuo)