On August 8, the highly anticipated Zhongfu Industrial reorganization case ushered in a finalized moment.
According to the announcement issued by *ST Zhongfu (600595, hereinafter referred to as “Zhongfu Industry” or the “Company”) that night, the manager of Zhongfu Industry and its five subsidiaries Zhongfu Power, Zhongfu Aluminum, Zhongfu Carbon, and Lin Feng The managers of Aluminum Power and Anyang Gaojing respectively received the “Civil Ruling” from the Zhengzhou Intermediate People’s Court (hereinafter referred to as “Zhengzhou Intermediate People’s Court”) and ruled to approve the reorganization plan of Zhongfu Industrial and 5 subsidiaries and terminate Zhongfu Industry and 5 subsidiaries reorganized procedures.
This is after Zhongfu Industrial and its five subsidiaries (including Zhongfu Power, Zhongfu Aluminum, Zhongfu Carbon, Anyang Gaojing, and Linfeng Aluminum) were approved by the second creditors’ meeting. The key ruling made by the court, the company will enter the implementation period of the reorganization plan.Zhongfu Industrial will resolve debt risks through reorganization as a whole, coupled with the optimization of the company’s industrial layout and transformation and upgrading, it is expected to be rejuvenated and achieve healthy, healthy and sustainable development.
In the past few years, the court system in Henan Province has successively completed the judicial reorganization of Lianhua Health, Huanghe Chemical, Henan Construction Group and other enterprises, setting a model for similar reorganization cases.The Zhengzhou Intermediate People’s Court ruled on July 7 to approve the reorganization plan of Yulian Group, the controlling shareholder of Zhongfu Industrial. With the approval of the reorganization plan of Zhongfu Industrial, the Yulian-Zhongfu reorganization case has lasted more than 29 months. The restructuring process is all completed.With the support and guidance of governments at all levels in Henan, and under the premise of compliance with laws and regulations, the balance of interests of all parties should be taken into account as much as possible, and the bankruptcy reorganization system can effectively play the function of saving distressed enterprises and serving economic development.
To protect the interests of all parties, the reorganization plan is released
Aluminum is an important industry in the national economy. In the process of domestic aluminum industry rectification and intensified competition in recent years, Zhongfu Industry has formed an industrial chain with aluminum and aluminum intensive processing as the main industry chain, but rapid expansion superimposed on the financial period from 2018 to 2020. Due to the tightening of the general environment and the cyclical fluctuations of the industry, the company’s short-term debt is large, financing channels are blocked, and liquidity is tight.
Due to Zhongfu Industrial’s inability to pay off its due debts and its apparent lack of solvency, Zhengzhou Intermediate People’s Court ruled on December 2020, 12 to accept the reorganization of Zhongfu Industrial in accordance with the creditor’s application, and appointed Zhongfu Industrial’s liquidation team as the administrator. Responsible for various tasks during the reorganization period.
Under the coordination of the government and the court, the administrator through a high degree of coordination, effectively organized the interested parties to negotiate and self-determine, and the “Reorganization Plan (Draft)” was formed, which was finally approved by the creditors meeting and laid the foundation for the continuous operation of the company. Ensuring the stability of employees’ employment and safeguarding the interests of all parties also provides a rare example for the country’s deepening reforms and industrial economic restoration.
According to the approved reorganization plan, Zhongfu Industrial intends to implement the conversion of capital reserve into share capital, which will be all used for reorganization, part of which will be used to offset debts with shares, and part of conditional disposal and realization will be used for reorganization.This move is similar to the previous reorganization practice measures, that is, to coordinate the use of capitalized stocks transferred by listed company investors to introduce investors and pay off debts, so as to ensure the overall operating value of the listed company sector.
Through reorganization, the financial institutions will temporarily loosen the company’s bonds in exchange for long-term growth, and the financial creditors will obtain the equity of the listed company to share the company’s future earnings.After the reorganization is completed, the company will return to a healthy development track. Whether the company can continue to achieve performance in the future is not only whether the company can smoothly pass the transition period, but also the key to achieving a long-lasting foundation.
In the reorganization plan of Zhongfu Industrial, it is stipulated that the controlling shareholder needs to promise 3 years of performance of 28 billion yuan: After the reorganization process is over, it will integrate existing assets, inject assets, adjust the profit model, etc., so that Zhongfu Industrial will be The net profit attributable to the parent in 2021 and 2022 shall be no less than 2023 million yuan, 6 million yuan, and 8 billion yuan respectively, or the total net profit attributable to the parent shall not be less than 14 billion yuan.The controlling shareholder Yulian Group agreed to the reorganization plan, indicating that shareholders and management have confidence in fulfilling this performance commitment target.
Integrate industry chain sectors and strengthen aluminum intensive processing
Since the entire industry chain operation is the core business model of Zhongfu Industry, the five subsidiaries of Zhongfu Industry, as important and core subsidiaries of Zhongfu Industry, can quickly resume production and operation and create incremental profits after the reorganization, which is an overall reorganization. An important source of debt service resources for the program.Therefore, the five subsidiaries of Zhongfu Industry will continue to remain in the Zhongfu Industry system and maintain the synergy advantage of the existing industrial chain, which is conducive to realizing the overall asset value.
After the reorganization is completed, Zhongfu Industrial is divided into four major business segments, namely high-precision aluminum, secondary aluminum (new), electrolytic aluminum and thermal power. It will achieve business integration and improve asset quality through equity structure adjustments.
In the company’s industrial chain, aluminum deep processing is an important growth point for the company’s future performance.The reorganization plan determines the future industrial transformation and upgrading and key development direction of the company as aluminum intensive processing.At present, the domestic market share of the company’s can lid materials continues to be stable in the forefront of the market, and has been supplied in large quantities to the top three can manufacturers.In the future, the company will optimize and strengthen existing products such as cans, aluminum alloy sheets, double-zero aluminum foil wool, etc., and take advantage of production technology such as ship plates and automobile plates to combine the future automotive lightweight and electronic product market needs. , To accelerate the research and development of new products and cultivate new business growth points.
Therefore, Zhongfu Industry has strong market competitiveness in aluminum intensive processing and has a good market prospect. In the first half of 2021, the sales volume of aluminum intensive processing business increased by about 48.3% year-on-year, which will drive the company to achieve revenue growth. This business is expected to be After the completion of the reorganization, the performance of listed companies continued to grow steadily and lay a solid foundation.
Adjust the layout structure and actively cultivate new growth points
According to estimates by Haitong Securities, in 2020, the electrolytic aluminum industry will emit about 4.43 million tons of carbon emissions, accounting for about 4.6% of the total domestic carbon emissions. Related companies not only have a large energy purchase burden, but also limit their sustainable development capabilities.In the past few years, under the severe aluminum industry situation brought about by the reduction of production capacity in the electrolytic aluminum industry, China’s aluminum industry, Shandong Weiqiao and other peer companies have replaced electrolytic aluminum production capacity to Yunnan.Zhongfu Industry is also actively seeking rebirth in self-rescue, transferring electrolytic aluminum production capacity to Sichuan, which is rich in hydropower resources. The project will be put into production gradually at the end of 2019 and will be energized one after another, and plans to gradually reach full-load operation and realize profit gains by reducing energy costs. .
With the advancement of the company’s industrial transfer, the regional layout structure and energy structure have been double-optimized, and the scale has also grown. It has seized the golden cycle of rising aluminum prices in the past six months and has become a bright spot to support the company’s turnaround.The forward-looking layout of the company’s management has blossomed, and it has laid a good foundation for the in-depth layout of the industry chain in the future.After the reorganization plan takes effect, and subject to relevant laws and regulations, listed companies will take advantage of the cost of “green hydropower and aluminum”, green and low-carbon industry advantages, integrate relevant resources, further adjust the energy consumption structure, and optimize. The industrial structure and layout will enhance the profitability of listed companies.
After the completion of the reorganization, Zhongfu Industry will fundamentally resolve the corporate debt risk and prevent the company from going into bankruptcy and liquidation.With the improvement of operating capacity and profitability, it will be more conducive to protecting the rights and interests of creditors and small and medium investors of listed companies, maintaining local economic and social stability, and also nurturing “international and domestic” aluminum deep processing.Relevant persons of the company said that they will continue to improve the development and layout of domestic and foreign markets, and strive to become an international green aluminum supplier.
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