Cash for the king: Cheng Star shares to raise capital to buy hydropower large shareholders want money not equity

-This reporter Chen cash for the king.　　Cheng Star shares because of cash flow tense rather than publicly issued shares, the controlling shareholder Cheng Star Group to inject assets into the company as long as the cash not equity. Cheng Star shares (600078,SH) recently issued a board resolution, said the company intends to issue 30 million shares to 150 million shares, to raise about 1 billion yuan funds for the acquisition of the holding shareholder Cheng Star Group held a 55% stake in the Thunder Beach hydropower Station, calcium phosphate technical renovation project,　　and repayment of bank loans and supplementary liquidity. Cheng Star Group owns 26.22% of the shares of Cheng Star, is the company's controlling shareholder. However, the group and its control are not involved in the subscription of Cheng Star shares in the private issue of shares.　　On the contrary, the company will pay 250 million yuan in cash to the controlling shareholder to acquire a 55% stake in the project. Some investors have questioned why the company has increased loans and high asset-liability ratios on the other side, but has repeatedly taken out hundreds of millions of of dollars in cash to acquire the assets of major shareholders.　　Is it because the large shareholder Cheng Star Group funds shortage, listed companies for blood transfusion? June 10, "Securities daily" reporter telephone interview with Cheng Star shares Dong Xiahi, he said that the current non-public offering and related trading programs, is the company, major shareholders and lawyers, such as the integration of various aspects of the determination.　　He denied that the group was short of money.　　Capital shortage to raise more than 1 billion Yuan Cheng Star shares recently a series of capital operations, there is only one purpose: To obtain more cash flow. The private issue, Cheng Star shares proposed to issue a minimum of 30 million shares, up to 150 million shares.　　The issue price is not less than 20 days before the resolution of the Board of Directors 90% of the average value of the stock, according to this pricing principle, the price is at least 7.21 yuan/share. Therefore, if the private issue can be completed, Cheng Star shares will raise nearly 1 billion yuan of funds.　　of which 250 million yuan for the acquisition of the holding shareholder Cheng Star Group held a 55% stake in the Thunder Beach hydropower station, 196 million yuan for calcium phosphate technology, the remaining 550 million yuan for repayment of bank loans and supplementary liquidity. Cheng Star shares Dong Xiahi said that the company in the past few years in a large-scale construction period, the construction of Yunnan Electric Phosphorus integration project, resulting in a substantial increase in investment scale, the company's asset-liability rate continued to rise.　　As of March 31, 2009, the company consolidated statement of assets and liabilities ratio of 68.73%.　　Public information shows that the Cheng Star shares in May 2007 through the issue of convertible bonds raised funds 440 million yuan, deduction of the actual cost of collecting funds for 424 million yuan, all for the additional holding subsidiary of Yunnan Xuanwei Phosphate Electric Co., Ltd.　　August 2008, Cheng Star shares in preparation for the construction of 120,000 tons of special phosphoric acid project, the total investment of nearly 200 million yuan, at the same time preparing for the construction of 20,000 tons of special hydrogen phosphate project, a total of about 40 million yuan. In 2008, Cheng Star shares said that the 2009 required expenditure of 400 million yuan, of which 200 million yuan continue to invest in Xuanwei phosphate electricity, electricity, phosphorus integrationProject, 150 million yuan for the technical renovation, Yunnan own phosphate mine mining still need to invest 50 million yuan. As of March 31, 2009, Cheng Star shares of current assets total 2.669 billion yuan, of which inventory of 895 million yuan, the total flow of liabilities of 3.171 billion yuan, including short-term loans of 1.841 billion yuan.　　The calculation shows that the ratio of the clear star shares flow is 0.84, the speed ratio of 0.56, all up to less than 1. In April, the Cheng-star shares also eased liquidity pressure through a after-sale lease. According to the announcement, Cheng Xing shares will book net worth 200 million yuan of its own equipment, to "after-sale rent" way to the people's livelihood leasing companies to apply for financing leasing business, the equipment is transferred to the people's livelihood leasing, and then signed a lease contract, lease contract period of the company to the people's Livelihood leasing company　　18.1651 million yuan per issue, three years total 12 period. Cheng Star shares Dong Xiahi said that the transaction has been implemented, the initiative for the company to bring the financing amount of 200 million yuan, not only to revitalize the company's existing assets, but also to ease the liquidity pressure.　　This non-public offering raises funds for repayment of bank loans, helping to reduce the company's asset-liability ratio and reduce financial costs. A premium of 45.83% acquired assets is not intended to take part, although it is a private issue of shares to 10 investors within the group.　　In addition, in the expected collection of nearly 1 billion yuan in cash, the Cheng Star stake will be taken out of 250 million yuan, the acquisition of Cheng Star Group held a 55% stake in the Thunder Beach hydropower station.　　June 5, Cheng Star shares and Cheng Star Group signed the "Equity transfer Agreement", Cheng Star Group will be its possession of 55% of the mine Beach hydropower station transfer to Cheng Star shares, the transfer price to the Thunder Beach hydropower station March 31, 2009 net assets valuation basis, a total of 250 million yuan. Data show that the project was completed and put into operation in 2006, including hydroelectric power, electricity sale, cultivation and aquaculture. As of March 31, 2009, the company's total assets of 657 million yuan, net assets of 312 million yuan.　　It achieved a net profit of 40.9284 million yuan in 2008, but only 3.74 million net profit was achieved in the first quarter of 2009 years. According to the income law, the net assets of the Thunder Beach hydropower station are 312 million yuan, the evaluation value is 455 million yuan, the value added is 143 million yuan, the value added is 45.83%.　　Compared to 55% of the equity, the transaction price is 250 million yuan. This reporter interview Cheng star shares Dong Xiahi learned that the main Beach hydropower station for the Yunnan province, the county Phosphate Electric Chemical Co., Ltd., the latter is a holding subsidiary of Cheng Star shares.　　2008 Annual report shows that the Cheng star shares in 2008 to the Thunder Beach hydropower station procurement 381 million-degree electricity, the associated transaction amount of up to 76.3817 million yuan. For the company why a premium of 143 million yuan for the acquisition of the large shareholder's stake in the Thunder Beach hydropower Station, Xiahi explained that the main raw material is yellow phosphor, which accounted for about 60% of the production cost of yellow phosphorus. He introduced that in Yunnan, hydroelectric power stationMore difficult to batch, and the construction cycle is long. The major shareholders bear the risk of the construction of the Thunder Beach project, and wait for the company to have a stable income before it is injected into the listed company, which actually protects the company shareholders ' interests.　　The company acquires stakes in the hydroelectric power station, so it can maintain a stable supply of energy and raw materials. Associated transactions big shareholders as long as the real money but, Cheng Star Group and Cheng Star shares of the transaction is not commonly used in the "asset-for-equity" approach, but the way of cash transactions.　　Cheng Star shares in the Non-public offering completed, will be taken out of 250 million of the cash directly paid to the Cheng Star Group, as the Thunder Beach hydropower equity trading on the price.　　Data show that at the end of 2008, the Cheng Star shares also took out 114 million yuan in cash, the acquisition of large shareholder Cheng Star Group Holdings of Jiangyin Cheng Star Daily Limited 32.74% of the equity. As a result, investors have questioned why the shares of the company are increasing loans and high asset-liability ratios, while the other side has repeatedly taken out $ hundreds of millions of in cash to acquire the assets of major shareholders.　　Is it because the large shareholder Cheng Star Group funds shortage, listed companies for blood transfusion? Data show that on May 22, Cheng Star Group will hold all its shares of Cheng Star, pledged to China Construction Bank Jiangyin Branch, the pledge period of 5 years.　　If in accordance with the closing price of 7.52 yuan/share in the day, Cheng Star Group held 170,826,693 stock prices of 1.281 billion yuan, Cheng Star Group can also obtain large loans. Xiahi denied the big shareholder's lack of money, "not because of funds to determine the plan."　　He just said that the current scheme might be easier to approve. Prior to this non-public offering, Cheng Star Group held 26.22% of the proportion of companies, if the participation in additional, it is easy to break through 30%, triggering an offer acquisition treaty, which requires the SFC exemption. Cheng Star shares in the number of private shares of the ceiling of 150 million shares, according to the current plan, if the number of shares issued by the upper limit, Cheng Star Group shareholding will fall to 21.31%.　　In this respect, Xiahi said, big shareholder Cheng Star Group does not participate in this non-public offering, but can increase the company's shares by other means. However, the industry analysis that the shares of Cheng-Star stock price corresponding to the higher valuation level, investors involved in the issuance of another year's restricted period, more uncertainties in the next year.　　If the major shareholder Cheng Group does not participate in the Non-public offering, will other investors have the confidence to participate in the additional issue?　　Xiahi explained that the company chose to issue more at this time, or more confident to keep the company's development, to bring investors return. For the issue of Cheng-Star shares, the majority of shareholders want money rather than equity, perhaps it is worth the small shareholders and investors to ponder.