The "10 billion arbitration case", which once caused heated discussions in the capital market, has now ushered in a dramatic reversal.
On the evening of January 11, Kehua Biotechnology (002022SZ, share price 989 yuan, market value 508.6 billion yuan) announced that in December 2023, the company's largest shareholder, Zhuhai Baolian, intends to transfer 5% of its shares in listed companies by way of public solicitation of transferees. On January 11, 2024, Kehua Biotech received a notice from Zhuhai Baolian, and the review committee of Zhuhai Baolian organized a review of the intended transferee, and determined that Xi'an Grant Thornton Benyi Enterprise Management Partnership (Limited Partnership) (hereinafter referred to as Xi'an Grant Thornton) met the transfer conditions of this public solicitation and was the transferee of this share transfer.
According to the announcement, Zhuhai Baolian intends to hold 2571510,000 shares (accounting for 5% of the company's total share capital, if the company's total share capital changes, the number of shares transferred will be adjusted accordingly, but the proportion of the number of shares transferred to the company's total share capital remains unchanged) transferred to Xi'an Grant Thornton, the share transfer ** is 20 yuan shares, and the total share transfer price is 5$1.4 billion.
After the completion of this transaction, Xi'an Grant Thornton will directly hold 5% of the shares of Kehua Biotechnology and control the company through voting rights entrustment1064% of the voting rights will control the company in aggregate 1564% of the voting rights, and at the same time, it will achieve substantial control over Kehua Biotech through the control of the company's board of directors.
This also means that after the completion of this transaction, Kehua Biotech's previous status of no controlling shareholder and no actual controller will change, Xi'an Grant Thornton will become the controlling shareholder of Kehua Biotech, and Peng Niancai, the actual controller of Xi'an Grant Thornton, will also become the actual controller of Kehua Biotech.
Kehua Biotech's main business is the R&D, production and sales of in vitro diagnostic reagents and medical testing instruments, and its independent products involve three major fields: molecular diagnosis, biochemical diagnosis and immunodiagnosis.
In 2018, Kehua Biotech invested 55.4 billion yuan acquired 62% of the shares of Xi'an Tianlong Technology *** and Suzhou Tianlong Biotechnology ***, hereinafter collectively referred to as Tianlong Company), and agreed to complete the acquisition of the remaining 38% equity of Tianlong Company in 2021. At that time, the overall valuation of Tianlong Company will be 900 million yuan or 25 times the non-net profit deducted in 2020, whichever is higher.
What Kehua Biotech failed to foresee was that the previous global new crown epidemic affected the performance of Tianlong Company, which is engaged in nucleic acid testing business, in 2020. If Kehua Biotech acquires the remaining 38% equity of Tianlong Company according to the original agreement, it will cost as much as 1050.4 billion yuan of sky-high costs. In July 2021, when it was difficult to reach an agreement with the listed company, the minority shareholders of Tianlong Company filed an arbitration and claimed 10 billion yuan from the listed company.
Since then, the "10 billion arbitration case" has lasted for more than a year, during which there has also been news that the subsidiary did not cooperate with the audit of the parent company's annual report, resulting in the listed company being "put on a star and hat". It wasn't until September 2022 that the stalemate between the two took a turn for the better.
It is worth noting that since 2018, the "status" of Kehua Biotechnology and Tianlong Company has also quietly changed. At the beginning of the acquisition, Xi'an Tianlong and Suzhou Tianlong were two loss-making companies, and the net profit of Xi'an Tianlong in 2015, 2016 and the first three quarters of 2017 was 17880,000 yuan, -501530,000 yuan and -154140,000 yuan. Suzhou Tianlong's net profit in 2015, 2016 and the first three quarters of 2017 was -178320,000 yuan, -116850,000 yuan and -328410,000 yuan.
At that time, there was no shortage of doubts in the market about Kehua Biotech's acquisition of these two loss-making companies at a premium. However, Kehua Biotech believes that Tianlong Company will have strong profitability in the future, and the integration of Kehua Bio's business assets can exert corresponding synergies to support the higher value-added rate of income method evaluation.
The development of Tianlong in the following years also confirmed the investment vision of Kehua Biotech's management at that time, and it can even be said that it far exceeded the initial expectations. According to Kehua Biotech's 2023 semi-annual report, Xi'an Tianlong has become an important subsidiary and profit pillar of listed companies, with revenue and net profit of 66.9 billion yuan, 14.1 billion yuan, the revenue and net profit attributable to the parent company of Kehua Biotechnology were 139.6 billion yuan, 2112810,000 yuan.
In this context, a big drama of "the actual controller of the subsidiary is mainly anti-customer and successfully enters the parent company" is about to be staged. According to the latest announcement of Kehua Biotechnology, the actual controller of Xi'an Grant Thornton is Peng Niancai, who holds 505414% of the shares, relevant reports and third-party platform information show that it is also the founder and shareholder of Xi'an Tianlong;The third largest partner of Xi'an Grant Thornton - the two partners of Xi'an Nuocheng Zhixin Enterprise Management Partnership (General Partnership) are Li Ming and Miao Baogang, and the third-party platform information shows that the two are the general manager and director of Xi'an Tianlong.
Kehua Biotech announcement.
This also means that the shares and voting rights to be transferred by Zhuhai Baolian will be transferred to the management team of Tianlong Company.
Kehua Biotech announced that the two sides intend to cooperate with the promotion of the adjustment and re-election of the board of directors and the board of supervisors of Kehua Biotech, so as to achieve a total of 9 seats on the company's board of directors (including 1 chairman, 1 vice chairman, 3 independent directors), 3 seats on the board of supervisors (including 1 employee supervisor), Xi'an Grant Thornton nominated 5 non-independent directors and 2 shareholder supervisors, recommended 3 independent director candidates, Zhuhai Baolian nominated 1 non-independent director, and 1 employee supervisor was democratically elected by the employee congress or employees.
In addition to disclosing the information that the actual controller of the listed company will change, Kehua Biotech has also made adjustments in its latest announcement around the terms of the key investment agreement that triggered the "10 billion arbitration case".
According to the announcement, Kehua Biotechnology and Peng Niancai, Li Ming, Miao Baogang, and Xi'an Yujing Tongyi Enterprise Management Partnership (Limited Partnership) (hereinafter collectively referred to as the original shareholders) signed the "Investment Agreement" on June 8, 2018, and the listed company obtained a total of 62% of the equity of Tianlong Company. Among them, Article 10 of the Investment Agreement, "Further Investment Clause", stipulates the arrangement of the remaining 38% equity of Tianlong Company held by the original shareholders.
Among them, the key investment agreement clauses that directly led to the "10 billion arbitration case" are as follows: on the premise of the completion of the second delivery, the original shareholders have the right to request Party A Kehua Biotechnology to transfer all the equity of the target company held by it at that time in 2021. At that time, the overall valuation of the target company shall be subject to the higher of the following two: (1) 900 million yuan;or (2) 25 times the audited net profit of the target company in 2020 after deducting non-recurring gains and losses.
Now, Kehua Biotech announced that in view of the market environment and the actual situation of the company, after friendly consultation between all parties, Kehua Biotech and Peng Niancai, Li Ming and Miao Baogang signed the "Supplementary Agreement to the Investment Agreement" on January 11, 2024, and terminated Article 10 of the "Further Investment Clause" of the "Investment Agreement".
National Business Daily.