First Quarter Report Of A-Share Refinancing: 125 Companies Raise Capital By Fixed Increase, Breaking Ice One Year After 2015 Billion War Investment

In the equity financing market in 2021, refinancing is still flourishing.

In particular, the gem registration system has become the main force of refinancing.

Wind data shows that as of March 29, the number of enterprises that have completed additional issuance financing has exceeded 125, with a total financing amount of 2015.13 billion yuan, compared with 43 enterprises and 153.967 billion yuan from January to March last year.

Under the promotion of the registration system, the number of enterprises applying for refinancing registration on GEM has reached 73 since this year.

From the perspective of type, private placement is the mainstream, among which bidding for fixed increase is the most popular. Among the 125 listed companies that have completed the private placement this year (the listing date of new shares is 2021), 82 of them choose fixed increase through bidding. The lock price fixed increase is mainly subscribed by the major shareholders and their related parties, and many shareholders take the lock price fixed increase as one of the popular auxiliary ways to acquire listed companies.

It is worth mentioning that in March this year, the fixed price and fixed increase of war investment broke the ice one after another. The refinancing schemes of Debang company introducing Yunda shares and leading intelligence into Ningde era were approved successively, which rekindled the enthusiasm of the market for lock price and fixed increase.

Sun Jinju, a small cap analyst of Kaiyuan securities, predicted: "looking forward to 2021, under the background of continuous recovery of earnings and high discount to ensure high success rate, the scale of fixed increase market will continue to maintain rapid growth, and the annual financing scale is expected to exceed 700 billion yuan."

Fixed increase becomes an important way of "changing ownership"

The first quarter of 2021 continued the hot refinancing trend in 2020.

Since this year, as of March 29, the number of listed companies that have completed refinancing has reached 1 / 3 of that of last year, and the refinancing activity of listed companies has increased rapidly.

During this period, 149 enterprises newly issued refinancing plans and disclosed the amount of financing, with the proposed amount of funds raised exceeding 294.4 billion yuan. Among them, 38 enterprises' financing projects included Supplementary working capital, 99 enterprises' fixed increase purpose included project financing, and the remaining 5 and 7 enterprises respectively increased their financing funds for the purpose of acquiring other assets or supporting financing.

From the type of fixed increase, bidding still accounts for the majority, of which 88 enterprises use bidding for fixed increase, and 61 enterprises adopt lock price fixed increase mode. Among them, the major shareholders, related parties of major shareholders, actual controllers or institutions controlled by actual controllers adopt the method of lock price fixed increase.

It is worth mentioning that after the issuance of the new regulations on refinancing, price lock up and fixed increase has become one of the important auxiliary ways for some shareholders to acquire listed companies.

St ROP, which completed the listing of new shares on March 4 this year, has achieved one of the purposes of consolidating the control rights of the new controlling shareholders.

In April 2020, St ROP disclosed the share transfer agreement and fixed increase plan. The original controlling shareholder ropsky transferred 29.84% of the equity to Suzhou Zhongheng, the controlling shareholder of Jiangsu large construction contractor zhongyifeng construction group.

According to the fixed increase plan, St ROP issued additional shares to Suzhou Zhongheng, raising 506 million yuan. The price of Transferred Equity of Suzhou Zhongheng is 80% of the average trading price of the company's stock 20 trading days before the pricing benchmark date. After the successful completion of the fixed increase, Suzhou Zhongheng holding 45.97% of the shares of the listed company became the new controlling shareholder, while ropsky holding 27.43% of the shares "retired to the second tier".

In this year's newly issued fixed increase plan, Huadong heavy machinery will also realize the change of control right through fixed increase.

According to East China heavy machinery's announcement on January 19, it plans to issue no more than 300 million shares in private and raise no more than 984 million yuan from Zhou Wenyuan, the company's major shareholder. After the completion of the fixed increase, the actual controller of the listed company will also be changed from Weng Yaogen, Meng Zhenghua and Wenjie to the current major shareholder Zhou Wenyuan. The fixed increase price will not be less than 80% of the average trading price of the company's stock 20 trading days before the pricing benchmark date

In fact, it is not new to realize the acquisition of control right through "agreement transfer + fixed increase (+ voting power entrustment)".

As early as may 2019, that is, before the new refinancing regulations came out, Federal Reserve securities assisted Changsha water industry, the purchaser of HBP, to purchase control rights in a bold way of "agreement transfer + voting power entrustment + fixed increase", creating a precedent of embedding lock price fixed increase into the control right transfer of listed companies. At present, the huibopu lock price and fixed increase project has been successfully implemented, and Changsha water industry has successfully taken over huibopu.

In 2020, with the further deregulation of refinancing, it is common to adopt "lock price fixed increase + control share transfer" in acquisition.

According to the summary of the A-share M & a market in 2020 and the forecast for 2021 issued by the Federal Reserve securities, in 2020, a total of 13 A-share listed companies realized the change of control right by means of fixed increase.

A typical case is Bishui. Its original actual control, humanistic Jianping, transferred 10.12% of its shares to urban and rural areas of China in 2019. In 2020, it entrusted the voting rights of 13.40% of the shares to urban and rural areas of China, and issued 481 million shares to urban and rural areas in China, raising 3.716 billion yuan. After the transaction, urban and rural China became the controlling shareholder of Bishui, and the SASAC of the State Council became a new reality International controller.

In addition, fixed increase is used in the cases of Hangcheng group's acquisition of Baoying shares and Lianfa investment's acquisition of Hecheng shares.

As for the reasons for the gradual prosperity of this method, the securities M & a team of the Federal Reserve believes that "under the new rules of refinancing, the fixed price increase for the purpose of obtaining control right can be locked in advance and given a 20% discount, which can significantly reduce the total acquisition cost. In addition, when purchasing a listed company through fixed increase, the capital is not used to cash out by the original major shareholders, but directly into the listed company It has realized that "fertilizer and water do not flow into the field."

War casting fixed increase ice breaking

It is worth mentioning that in addition to more common financing channels and more diversified capital operation, 21st century economic reporter noted that in 2021, the war investment type fixed increase has also successfully broken the ice.

On February 14, last year, after the new regulations on refinancing were put forward, the option of "introducing strategic investors" was introduced, which means that strategic investors who meet the relevant requirements can enjoy the "treatment" of "20% off the price lock" and "18 months of sales restriction".

As soon as the news came out, the new regulation was soon sought after by listed companies and institutions, and plans for the introduction of war investment emerged in endlessly. However, due to the unclear standard of "war investment" and the existence of arbitrage space, the war investment fixed increase has not been implemented yet. Many listed companies that use the war investment fixed increase have withdrawn their plans or revised them one after another. Especially, the high-altitude battle investment kaleyin scheme, which has attracted much attention, was withdrawn. After the modification, the war investment fixed increase was once "in vain".

However, in March, the plan of introducing "strategic investor" Yunda shares into Debang Stock Co., Ltd. was officially broken after obtaining the approval of CSRC.

On March 9 this year, Debang announced that the CSRC approved the company to issue no more than 66.7391 million new shares to Yunda shares. After the completion of the transaction, Yunda shares will hold about 6.5% of the shares of deppon shares, and will appoint a non independent director to deppon shares, which will become the second largest shareholder of deppon shares. The two sides also signed a strategic cooperation agreement. The raised funds of non-public issuance will not exceed 614 million yuan, which will be used for the upgrading of intelligent equipment in the transfer center and the construction of it information system.

On March 10, leader intelligence was introduced into Ningde times and officially held a meeting as a strategic investor. According to the plan, pilot intelligence plans to issue 69.35 million shares to Ningde era at a price of 36.5 yuan per share, with a lock-in period of 36 months. After the issuance, Ningde era will hold 7.10% of the shares of leader intelligence and become a shareholder of more than 5% of the shares of leader intelligence.

"If it is said that after the meeting of the first lock up price and fixed increase of deppon shares, whether the market will open the channel of price locking and fixed increase is still uncertain, whether deppon shares belongs to" one project, one discussion ", and the second single leader intelligent meeting will make the situation clear. In particular, the two listed companies have the same points in the plan, such as 36 months lock-in period, appointment of directors, quantifiable strategic cooperation plan, etc Ruan Chao, founder of Fuxin literature and art.

In Ruan Chao's opinion, there are many common points in the fixed increase plan of leader intelligence and deppon shares. For example, the issuing object is the strategic partner itself, the lock-in period is 36 months, and the shareholding ratio of the war investor is more than 5%. The strategic cooperation agreement is specific and feasible. Both directors are appointed to participate in the operation, and the raised funds have clear project investment direction, rather than all supplementary flows.

However, despite this, many people in the industry still believe that the current standard for defining strategic investors is still not workable. The securities M & a team of the Federal Reserve pointed out that in 2020, most of the fixed increase plans introduced by war investment will either be terminated or adjusted to fixed increase through inquiry. It will not be until February 2021 that the fixed price increase of Debang shares has been approved, which will lead to the introduction of "ice breaking" for listed companies. In this case, the regular period of war investment lock up of Debang shares is adjusted from 18 months to 36 months.

The securities M & a team of the Federal Reserve suggests that "the price locked issuance of pre lock war investment should not stay at the fuzzy stage, but should clarify the standard to improve the operability. If it is difficult to identify the identity of strategic investors, it is suggested to consider from the time dimension of lock in. For example, strategic investors who have voluntarily locked in for more than 36 months can enjoy lock in price and fixed increase. Only when the standard is clear can it be really conducive to the introduction of strategic investors by listed companies, but also conducive to the reform of state-owned enterprises in full swing. "

On the other hand, with the ice breaking of the war investment fixed increase, some market participants are worried that the war investment fixed increase may bring related party transaction problems to both sides of the transaction.

"There is a problem with war investment, that is, there may be large related party transactions," a person from the merger and Acquisition Department of an investment bank of a medium-sized securities firm in South China pointed out to the reporter of the 21st century economic report that "the war investment is bound to hold a large proportion of shares, and its business volume is large. Basically, it will bring in orders, which will constitute a large amount of related party transactions."

For example, leader intelligence and Ningde era cooperated closely before the fixed increase. Earlier, pioneer intelligence announced that from September 21, 2020 to November 20, 2020, leader intelligence and its subsidiary Titan won a total of 3.228 billion yuan orders from Ningde era and its holding subsidiary, accounting for 68.92% of the total audited revenue of the company in 2019.

Faced with the problem of related party transactions, pioneer intelligence once pointed out in reply to the inquiry letter that after the completion of the private placement, the transaction between the company and Ningde times still follows the commercial principles to determine the transaction content and the transaction price through negotiation, and uses market-oriented methods such as bidding or negotiation to determine the transaction price, relevant sales terms and settlement policies, and there will be no new obviously unfair related party transactions 。

At the same time, the company has also developed internal control measures on related transactions, which can effectively prevent the transfer of interests.