Woori Holdings terminates its reorganization of Zhongqing Longtu's backdoor "broken dream"

"Success also defeated Xiao He." The Zhongqing Longtu backdoor case, which was once promoted by the popular online game "Legend of the Knife Tower", ended in failure. The reason for its failure was actually the main product of Zhongqing Longtu,"Legend of the Knife Tower". The court was deeply involved in litigation, resulting in greater uncertainty in future operating results. As a result, Wooli Holdings (000584), which is the backdoor target, announced today that after consultation by all parties, it unanimously agreed to terminate this material asset reorganization.

In May of this year, Woori Holdings released Zhongqing Longtu's 10 billion backdoor plan not only set a new record for mergers and acquisitions of domestic game companies, but also fully attracted the attention of the market with 17 consecutive daily limits at the opening. Behind its brilliance, it relies on a popular game "Knife Tower Chuangqi". Looking back on the reorganization plan, Wooli Holdings plans to replace 900 million yuan in assets with the equivalent of Yang Shenghui's equity in Zhongqing Longtu. At the same time, it plans to issue 1.654 billion shares to eight Zhongqing Longtu shareholders including Yang Shenghui to purchase their remaining equity in Zhongqing Longtu. After the transaction is completed, the listed company will change owners, and Yang Shenghui will become the new controlling shareholder and actual controller of the listed company. As a result, Zhongqing Longtu will enter the A-share market through backdoor Wooli Holdings.

It is understood that Zhongqing Longtu was established in 2008 and is mainly engaged in the research and development and operation of web games and mobile games. It is one of the leading online game developers and agent publishers in China. It includes web games and mobile games such as "QQ Nine Immortals","Dragon Secret","Sharpshooter","Miracle Comes","Legend of the Knife Tower", and "Ninja Q Legend". According to assessments, the estimated value of the company's 100% equity is 9.7 billion yuan, which is 23 times higher than the book net assets of 430 million yuan.

The 23-fold high premium and the "fight" between the financial data in the reorganization plan and the data disclosed by Shenzhou Taiyue, an important shareholder of Zhongqing Longtu, made Wooli Holdings 'tens of billions of backdoor case suspicious for a time. At that time, market doubts mainly focused on two points: first, whether the performance explosion brought by "The Legend of the Knife Tower" to Zhongqing Longtu could be sustained; second, whether the same financial data "turned from loss to profit" was suspected of artificially reaching the threshold of backdoor finance.

Amid doubts, Woori Holdings 'reorganization case was accepted by the China Securities Regulatory Commission on September 7. However, not long after, the reorganization target Zhongqing Longtu was involved in litigation over the copyright of "The Legend of the Knife Tower" and began to add variables to this backdoor borrowing. Judging from Wooli Holdings 'announcement today, this lawsuit has become a "terminator" in the Zhongqing Longtu backdoor case.

According to today's announcement, during the advancement of this major asset reorganization, Zhongqing Longtu and its partners Lilith Technology (Shanghai) Co., Ltd. and Weierwu Group have filed lawsuits for copyright, trademark exclusive rights infringement and unfair competition, the main product "Knife Tower Legend" issued and operated by Zhongqing Longtu. Regarding the above disputes, Zhongqing Longtu has communicated and negotiated with relevant parties, but as of now, such litigation is still in progress and no clear results are expected for some time.

Due to the uncertainty in the time schedule and outcome of the judicial process, the above-mentioned litigation may have a certain impact on Zhongqing Longtu's business operations and future performance realization, and increase the uncertainty of the review and implementation of this major asset reorganization. Woori Holdings stated that after consultation with other parties to this material asset reorganization, all parties unanimously agreed to terminate this material asset reorganization. The company terminated this material asset reorganization and withdrew relevant application documents. After in-depth discussion and negotiation between the two parties, it was agreed that Zhongqing Longtu would pay a one-time compensation of 12 million yuan to Woori Holdings. Woori Holdings also stated that the termination of this major asset reorganization transaction will not affect the company's existing business operations.

Coincidentally, the major asset reorganization that Pegasus International had been planning for more than four months ended before it came out. Pegasus International announced today that in view of the recent receipt by Huang Zhuangmian, the company's actual controller, chairman and general manager, of the "Investigation Notice" from the China Securities Regulatory Commission, it will mainly investigate the purchase of company shares in the company's employee stock ownership plan this year. According to relevant regulations, the company decided to terminate the planning of this reorganization. According to the company's previous preparatory progress, this reorganization originally planned to realize the company's dual main business development by issuing shares to purchase assets in the environmental protection industry.

Editor: yvonne