Tcl finally completed the MBO this year

Absrtact: In 3rd TCL Group (000100.SZ) 2014 Annual Report Communication meeting, when the reporter asked about the money from the venture investment business, TCL Group chairman and CEO Li inadvertently disclosed, completed 5.7 billion yuan, I have been (TCL) the first major shareholder. This is like a historical surprise

In 3rd TCL Group (000100.SZ) 2014 Annual Report of the communication meeting, when asked by reporters about the money from the venture investment business, TCL chairman and CEO Li "inadvertently" disclosed, "completed 5.7 billion yuan, I have been (TCL) the first major shareholder."

This imitation, such as the history of the glimpse, means that after 18 years of long restructuring, TCL finally completed the MBO this year (Management Holdings).

Over the past few years, with the increasing number of TCL business, in many additional fund-raising, Li are involved in the purchase of Tcl shares, but always with TCL major shareholder "Huizhou investment control" to maintain a certain share ratio gap, even less than 2%. Insiders believe that this is conducive to TCL use of state-controlled enterprises policy resources, but also access to private enterprises flexible decision-making advantages.

But why did Li choose "Equity beyond" at this time of the year, and openly "show the cards"? After all, Tcl completed the latest round of 5.7 billion yuan additional, the surface of the largest shareholder is still "Huizhou investment control."

According to the announcement of this February, TCL, after the completion of this issue, "Huizhou Investment and Control" holds Tcl's 7.2% stake, Li only with the subsequent, holding TCL 5.23% Equity, 3.92% of the purple communication, jumped into the third largest shareholder. TCL employees owned Dongxing Huarui, nine-day joint shareholding 3.71%, 3.35%, followed by Tcl Four, the largest shareholder. And because Li still has a stake in the two-employee shareholding platform. Therefore, it is estimated that his real stake in the first more than Huizhou investment control.

Oviyun Network (AVC) President Wen Jianping to the "First financial daily" reporter analysis that, first of all, from the policy perspective, the current Chinese government reform of state-owned enterprises have new ideas, promote mixed ownership reform, allowing the state-owned or state-controlled enterprises employees, management shareholding, the policy window has been opened.

Second, in terms of performance, Tcl last year's first income breakthrough of 100 billion yuan, net profit hit the best level in nearly 8 years. Tcl last peaked about 2002, 2003 years or so, when Tcl ACE Color TV and TCL mobile phones in the domestic market are in a leading position. "Now because there is huaxing photoelectric, creating a high profit, Tcl to the government, shareholders (including Huizhou) have confessed," Wen Jianping said.

Third, Tcl is being quickly laid out. Last year issued a "double +" Internet transition Strategy, the development of "global broadcasting" and other services, but also investment in film and television industry. In addition to the parent company TCL Group, it also has TCL Multimedia, TCL Communications, Kone Electronics, the Hong Kong-listed holding subsidiaries. Recently, TCL participated in restructuring Hong Kong listed companies only Crown International, want to build it as a bearing parts business another subsidiary capital platform. Slowly, TCL will become an investment operation platform.

"This requires the support of investors, funds, many people will ask whether you decide, you can make the final decision," Wen Jianping said, so Li need to show a gesture to the outside: I have been Tcl's first major shareholder, in Tcl can be finalized.

Wen Jianping that after the completion of MBO, TCL will have a greater degree of freedom of decision, the market can make a faster response. And after 18 years to complete MBO, but also benefited from Tcl in the early 1997 reform, access to Huizhou government support, "climate, geography, people and" to fulfill the TCL management shareholding restructuring. Li and Tcl's management team are also well deserved, contributing to the local government a "big plate" of billions of enterprises.

Historical data show that TCL Group's early restructuring, experienced the "state-owned enterprises-management stock-shareholding reform-A shares of the overall listing" of the development process, the first management shares in the 5-year period in 1997-2001 obtained.

April 1997, Huizhou Government approved TCL Group for operating state-owned assets authorized operation of the pilot, and with Li signed a 5-year decentralized operation agreement. According to the agreement, TCL to 1996 of 300 million yuan net assets all to Huizhou government all, thereafter the annual return on net assets shall not be less than 10%. If you grow by 10% to 25%, management can get 15%, increase by 25% to 40%, and management can get 30%, increase by more than 40%, and management can get 45% of them. "Incremental award Shares" around the state-owned enterprises to the stock assets restructuring in the embarrassment of pricing. Economist Zhou it as a "future-oriented compact".

Li has said that 1996 TCL sales revenue of only more than 3 billion yuan, to 2001, sales have been raised to more than 10 billion yuan, the tax should be turned over tens of millions of yuan, the profits of enterprises also increased substantially. State-owned assets are not only value-added but also fast. Before the reform, the state-owned assets were evaluated more than 300 million yuan. After the restructuring, the government took back more than 2 billion yuan, the state-owned assets magnified several times. "Tcl restructuring, no original sin."

TCL Group 2004 After the overall listing, the Huizhou government in Tcl's shareholding ratio from about 40%, after continuous reduction, to 2008 to 12.7%. And after the pain of international mergers and acquisitions, the company back to growth track, 2011 TCL again launched the Management option Incentive system. Li in the international financial crisis, China's capital market downturn, many times through the two-tier market to buy TCL and its subsidiaries of the shares, to boost the confidence of the capital market, and participate in TCL multiple issuance subscription.

Last year, TCL launched a new round of directional issuance, raised 5.7 billion yuan, including violet communication, the country opened three funds, as well as Li led the TCL management, and of course, "Huizhou investment control", are involved in the subscription new shares. This issue is not only for huaxing two phase of the project to provide 4 billion yuan construction funds for TCL Group supplemented 1.7 billion yuan liquidity, from now on, is TCL complete MBO "finishing a foot."

Tcl Core employees owned by the Dongxing Huarui, nine days joint subscription Tcl shares, respectively, holding Tcl 3.71%, 3.35% Equity, in turn, TCL Group Fourth, the five largest shareholder. Plus Li currently owns 5.23% of the TCL Group's equity, TCL executives have more than the actual shareholding ratio of the first major shareholder "Huizhou investment Control" held TCL Group 7.2% of the equity.

Li 18 Grinding a sword, finally completed Tcl MBO Reform, for the next step of the layout to open more space.