Huanrui Century's listing under the backdoor abortion curve is not "an end without illness"

However, Taiya issued an announcement saying that it decided to terminate the reorganization. At this point, the listing of Huanrui Century died again. However, despite the failure of the reorganization, Taiya shares 'share price continued to reverse the trading limit yesterday.

Since the beginning of this year, A-shares have set off a wave of capital mergers and acquisitions by film and television companies. Just two months ago, Huanrui Century Film and Television Media Co., Ltd.(hereinafter referred to as "Huanrui Century") from Hengdian Film and Television Industry Experimental Zone in Zhejiang announced that it would use Taiya Shoes Co., Ltd., the largest sneaker sole company in Quanzhou, Fujian Province. Co., Ltd.(hereinafter referred to as "Taiya Shares") went public on a curve. This also means that once this reorganization is successful, Zhejiang film and television stocks will add new players. However, yesterday, Taiya issued an announcement saying it had decided to terminate this reorganization. At this point, the listing of Huanrui Century died again. However, despite the failure of the reorganization, Taiya shares 'share price continued to reverse the trading limit yesterday.

Taiya shares terminated its reorganization

as early as mid-July. Taiya shares, with assets of 700 million yuan, put out a reorganization plan and planned to acquire Huanrui Century, which was valued at 2.738 billion yuan, in a "snake swallows the elephant" manner.

Data shows that Huanrui Century was established on September 29, 2006 with a registered capital of 98.6 million yuan. It is located in the Hengdian Film and Television Industry Experimental Zone in Zhejiang Province. The actual controllers are Chen Yuan and Zhong Junyan. The main business includes TV drama and film business, artist brokerage business, game development business, and TV drama music production business. The net profits in 2012 and 2013 were 88 million yuan and 106 million yuan respectively, and the net profit in 2014 is expected to be 175 million yuan.

Through this transaction, Taiya Co., Ltd. will set out the company's original shoe material production and sales business with weak profitability and unclear future development prospects, and inject into the film and television drama production and distribution and derivative business with strong profitability and broad development prospects.

However, less than three months after the plan was announced, Taiya announced last night that the reorganization would be "ended without illness."

On Wednesday evening, Taiya announced that in order to promote this material asset reorganization, the company, intermediaries and relevant parties had actively communicated and negotiated on this material asset reorganization, and finally no detailed transaction plan for the reorganization was reached. In order to protect the interests of listed companies and investors, after careful study, relevant parties decided to terminate this material asset reorganization through consensus.

"Suspicion of backdoor borrowing" may be an important reason.

Although Taiya did not clearly state the detailed reasons for terminating the reorganization in the announcement, some industry insiders speculated that the failure of the reorganization was likely due to the CSRC's failure to approve the reorganization plan.

In fact, Taiya shares admitted frankly when it disclosed its reorganization plan in mid-July,"During the review process, this transaction may be substantively identified by the China Securities Regulatory Commission as a backdoor listing and not approved."

Public information shows that as early as before the plan was issued, that is, on March 12 this year, the actual controller of Taiya shares signed the "Share Transfer Agreement" with domestic natural persons Lin Shiyi, Lin Jianguo, Lin Jiankang, Lin Qingbo and Ding Kunming respectively, transferring the 34 million shares they held were transferred to Lin Shiyi, and the remaining 60 million shares were transferred to four transferees, including Lin Jianguo, Lin Jiankang, Lin Qingbo and Ding Kunming. After the transfer, the actual controller of the company changed.

After the plan was introduced, Taiya shares first replaced 700 million yuan of assets with the equivalent portion of Huanrui Century; then, Taiya shares raised 220 million yuan from the major shareholder Lin Songbai, and the remaining 1.78 billion yuan was issued to the remaining shareholders of Huanrui Century at a rate of 7.95 yuan per share. Finally, the natural person who transferred the controlling shareholder's equity sold out the original business of Taiya shares of 700 million yuan.

Through first changing the actual controller, then issuing shares to third parties for targeted fundraising, and asset equivalent replacement, Taiya shares successfully avoided backdoor borrowing.

"Whether the reorganization failed because it failed to comply with laws and regulations, whether there was no agreement on the distribution of benefits, or whether the 'shell owners'(Taiya shares) were waiting for a high price, these may be the reasons for the failure, but the market has no way to know." Han Zhesheng, an analyst at China Investment Securities, pointed out that the listing of Huanrui Century Curve may not have been "ended without illness", but the real reason is unknown.

The failure of the reorganization is still difficult to stop the market's enthusiasm

. Despite the announcement of the failure of the reorganization, Taiya shares still encountered crazy speculation from hot money yesterday. They had a strong daily limit at the opening and were firmly locked on the daily limit throughout the day. At the close, the company's share price closed at 10.51 yuan/share, up 10.05% throughout the day, and the total transaction volume reached 129 million yuan.

"Even if this reorganization fails, it cannot be denied that Taiya shares are still a good shell resource. First, the total market value is not high, and secondly, the main business is not optimistic. It must be reformed or reorganized to change the dilemma." Regarding the negative news released yesterday, Taiya shares encountered a reverse trading limit. Han Zhesheng analyzed that this is not an isolated case. In the first half of this year, there have been cases in which many restructured stocks rose sharply in the reverse direction after encountering restructuring failures. Bunny Bunny and Zhejiang Furun are both typical examples.

Han Zhesheng believes that the reason why the reorganization of restructured stocks failed but rose sharply is that, on the one hand, the concept of reorganization has always been a hot topic in A-shares in the first half of this year, and the enthusiasm for participation remains high. Although the issuance of new shares has opened, there are still many queues, so Shell resources are still "precious"; at the same time, since June and July this year, the overall trend of A-shares has been volatile upward, and the good market has also given rise to certain conditions for restructured stocks to make up.

Editor: yvonne