After Feng Yao, a reporter from China's ** newspaper, announced that he would "repurchase" the assets with a discount of nearly two percent, the largest shareholder of East China Heavy Machinery began to raise money for it. On the evening of December 8, Huadong Heavy Machinery announced that Zhou Wenyuan, a shareholder of the company, intends to transfer 5% of the shares of Huadong Heavy Machinery to Chongqing Harmony Zhicheng Enterprise Management Partnership (Limited Partnership) (hereinafter referred to as Harmony Zhicheng) through agreement transfer. After the completion of this transfer, Zhou Wenyuan will also give up the position of the largest shareholder. It is worth noting that the amount of this transfer transaction is 21.2 billion yuan, and the transaction unit price is 42 yuan shares, which is 17 higher than the secondary market of listed companies65%, and the receiver has been established for less than 20 days. In fact, Zhou Wenyuan's intention to transfer the shares of the listed company has long been apparent. The reporter checked the information and found that everything seems to be designed for the transfer of the agreement, which is also regarded as a "curve", but why did the receiver take over the shares of East China Heavy Machinery held by Zhou Wenyuan at a certain premium?I can't help but wonder if there are other "drawer" arrangements behind this?Why don't you trade in the secondary market?According to the announcement of Huadong Heavy Machinery, the company's shareholder Zhou Wenyuan signed the "Share Transfer Agreement" with Harmony Zhicheng on December 5. According to the agreement, Zhou Wenyuan intends to transfer his Huadong Heavy Machinery 5038 to Harmony Zhicheng by way of transfer by agreement450,000 shares, representing 5% of the total share capital. 
Before the transfer, Zhou Wenyuan's shareholding ratio was 1326%, is the single largest shareholder of East China Heavy Machinery. After the completion of the transfer, its shareholding ratio was reduced to 826%, becoming the second largest shareholder of the listed company, and Harmony Zhicheng will become the fourth largest shareholder of the company with 5% of the shares. In this transaction, the first thing to pay attention to is the transaction consideration. According to the agreement, the amount of the transfer transaction is 21.2 billion yuan, and the transaction unit price is 4$2 shares. Compared with the current stock price of Huadong Heavy Machinery, 357 yuan shares (December 8 ** price), a premium of 1765%。Even if compared with the above-mentioned equity transfer agreement, the ** price on the day of signing is 372 yuan shares, the premium also reached 129%。
As the receiver of Harmony Zhicheng, why is he willing to take over for Zhou Wenyuan, which is more than the secondary market?Presumably many investors will have this question. The reporter consulted industrial and commercial information and found that Harmony Zhicheng was only established on November 23 this year, and it has been established for less than 20 days, and its partners are two natural persons Zhang Jing and He Bei. 
However, on December 5 (that is, the same day that Zhou Wenyuan transferred the shares of East China Heavy Machinery), the above-mentioned partners signed the "Capital Contribution Transfer Agreement" with Chongqing Shiyun Harmony Technology *** referred to as Shiyun Harmony). At the same time, on the same day, Shiyun Harmony signed the "Partnership Agreement" with Changzhou Guoke Lingjiu Equity Investment Partnership (Limited Partnership) and Chongqing Changchi Automobile Sales Service. The above three parties each have a share of Harmony Zhicheng. 29% and 7143%。It is worth noting that the reporter found that the establishment time of Fortune Harmony was December 1, and it was only a week after its establishment. In other words, the main body of a series of equity transactions seems to be set up for the transfer of 5% of the shares of Huadong Heavy Machinery. According to the announcement, within 6 months of the share transfer transfer, Harmony Zhicheng will pay Zhou Wenyuan all the consideration 21.2 billion yuan. Harmony Zhicheng promised not to ** its holdings of Huadong Heavy Machinery ** in any way within 6 months, including the new shares generated by the conversion of capital reserves, distribution of dividends, allotments, additional issuances and other matters during the commitment period. Cover the "face-changing assets".When it comes to Zhou Wenyuan, it can't get around the recent equity transaction of East China Heavy Machinery's "face-changing assets". On December 6, the board of directors of Huadong Heavy Machinery approved the related transaction of 100% equity of Guangdong Yuanyuan ** Runxing Technology controlled by Zhou Wenyuan. Interestingly, Runxing Technology was acquired by Huadong Heavy Machinery from Zhou Wenyuan 6 years ago by issuing shares to pay the consideration, and Zhou Wenyuan also became a shareholder of Huadong Heavy Machinery through this transaction. It's just that the consideration for the acquisition of Runxing Technology 6 years ago was 29500 million yuan, and now the first thing returned to the original owner is 700 million yuan, which is less than a fraction of the consideration at that time. In order to divest Runxing Technology, Huadong Heavy Machinery has also been listed on the open market for transfer, but no one cares. On September 7, Huadong Heavy Machinery disclosed that it publicly listed and transferred 100% of the equity of Runxing Technology to 9$3.7 billion is the reserve price for the listing, and the announcement period for the first listing is 10 working days (i.e., from September 8, 2023 to September 21, 2023). At that time, Huadong Heavy Machinery disclosed that Zhou Wenyuan intended to participate in the acquisition when the conditions were right. However, on September 22, Huadong Heavy Machinery received a notice showing that it had no intention to register for the transferee during the publicity period. Subsequently, Huadong Heavy Machinery decided to reduce the listing ** by 15% on the basis of the floor price of the first listing, that is, to 7The 9.7 billion yuan ** re-listed and transferred 100% equity of Runxing Technology, and the listing date is from September 25, 2023 to October 12, 2023. However, during the second public listing publicity period, there is also no intention to register for the transferee. Subsequently, on October 19, Huadong Heavy Machinery decided to transfer 100% of the shares of Runxing Technology for the third time, and the listing will be reduced to 700 million yuan. At the same time, Huadong Heavy Machinery signed an agreement with effective conditions with Zhou Wenyuan and Guangdong Yuanyuan controlled by Zhou Wenyuan, stipulating that if the intended transferee cannot be solicited during the public listing period, Guangdong Yuanyuan will receive the transferred assets at a transaction consideration of 700 million yuan. Rushing to raise money to pay the considerationObviously, Zhou Wenyuan's transfer of East China Heavy Machinery shares may have a direct connection with the equity of Runxing Technology. A closer look at the "Report on Major Assets and Related Party Transactions" disclosed by Huadong Heavy Machinery on December 6 found that Zhou Wenyuan** Huadong Heavy Machinery shares were mentioned. According to the announcement, Guangdong Yuanyuan was established on October 17, 2019, and Zhou Wenyuan is both an investor and a legal person. Zhou Wenyuan promised in the announcement that if the shares of East China Heavy Machinery held by him were fully lent to Guangdong Yuanyuan after tax deduction to pay for the equity transfer. Moreover, the announcement mentioned that Zhou Wenyuan held Huadong Heavy Machinery 13The 26% equity shall not be used for pledge or other security other than the purpose of the Equity Transfer Agreement. The reporter checked the pledge information and found that in August this year, Zhou Wenyuan had pledged 26 million shares of Huadong Heavy Machinery, accounting for 19 of his shareholding46%。In addition, Zhou Wenyuan also promised that after the transfer of property rights and before the payment of the equity transfer price, Runxing Technology's repayment of Zhou Wenyuan's loans, loans to Zhou Wenyuan and its related parties, and cash dividends to Guangdong Yuanyuan should all be used to pay the transaction equity transfer price. Obviously, the funds in Zhou Wenyuan's hands may not be enough to pay the consideration for the repurchase of Runxing Technology. What's more, because Huadong Heavy Machinery has not paid cash dividends for three years, the major shareholder ** is restricted by the rules. From this point of view, the transfer of agreement is the only way out for Zhou Wenyuan. In fact, this method is also regarded by the market as a "curve", and the listed company also gives Zhou Wenyuan a certain time limit. According to the announcement, Guangdong Yuanyuan is required to pay 20% of the total price of the equity transfer within 10 working days after the effective date of the Equity Transfer Agreement, 31% of the total price of the equity transfer within 30 working days after the effective date, and the remaining 49% shall be paid within 12 months after the asset delivery date. 
From this point of view, Zhou Wenyuan's transfer of 5% of the shares of Huadong Heavy Machinery seems to be a forward arrangement made to pay the transaction consideration for the repurchase of Runxing Technology, which is quite a meaning of "tearing down the east wall and making up the west wall". In this case, Harmony Zhicheng should have more say in the transaction, but it acquired the shares of East China Heavy Machinery at a high premium, which inevitably made the market wonder whether there was a "drawer agreement" behind the transaction.
Editor: Captain Review: Xu Wen.