Zheng Coal machine Workers old shares high premium transfer Gio response to loss of state capital

Xu Wei August 3, Zhengzhou Coal Mining Machinery Group Co., Ltd. ("Zheng Coal Machine" 601717.SH) in the Shanghai Stock Exchange officially listed transactions.　　The public issue of 140 million shares, raising funds of about 2.8 billion yuan for high-end hydraulic support production base construction projects.　　As the main production enterprise of hydraulic support of coal mine fully mechanized mining equipment in China, the road of Zheng Coal machine appears more smoothly: 2006 through the form of employee's shareholding to complete the enterprise joint-stock transformation; In 2007, we introduced strategic investors through equity transfer, and reduced the number of shareholders to meet the listing conditions; this April However, in recent time, the market for Zheng Coal Machine Restructuring of the listing process has been questioned, focusing mainly on Zheng coal machine in the process of restructuring, may be suspected of loss of state assets.　　Including concealment of assets, assessment of shrinkage, concealment of earnings, virtual increase in debt and so on.　　The main basis for this judgment is that, in 2006, Zheng Coal machine through the system reform program, the workers to 40 million yuan shares and the ownership of the reformed Zheng Coal machine 49% Equity, and 2007 these staff shareholders and 740 million yuan price changed hands. Faced with the surge of doubt, in the pre-IPO period of silence Zheng Coal machine has been chosen to silence.　　In late July, Zheng Coal Machine chairman Gio first responded to the details of the restructuring.　　Why to achieve high premium transfer "21st Century": 2006 Group company Reform, why choose to let the workers share, and then transfer the equity of this path, rather than directly into the strategic investors to achieve the value of the state-owned assets? Gio: At that time the restructuring actually did not think of the issue of listing not listed, just want to through restructuring, to establish a better enterprise development mechanism. According to the thought of Henan provincial government in that year, it is to be all privatized, and issued a document requirements must be completed.　　Considering the request of Henan provincial government, combined with the development of coal machine industry, the system finally chooses the state-holding form, that is, the Sasac in Henan Province holds 51% shares and the workers hold 49% of the shares. And in 2007 years, the company realized that the enterprise should really do strong, must take the road of capitalization. The Henan provincial government also asked the company to hurry to market.　　But at that time the structure of the shareholding is too fragmented, not on the market, the company has more than 1800 employees holding shares, and the SFC requires listed companies should not have more than 200 original shareholders, want to go public must first transfer and centralized equity.　　"21st century": then why in a short span of a year, 49% of the employee shares have such a high premium, 2006 staff shares when the cost of only 40 million yuan, and 2007 equity transfer has been as high as 740 million yuan, whether there are assets to assess the fraud behavior? Gio: First of all, we are state-owned enterprises, in 2006 when the enterprise reform, who to assess, how to evaluate not our decision, but by the provincial Sasac and provincial finance department through the tender designated institutions to do the assessment, we just cooperate. And all the results of the evaluation in Henan Province Sasac, the financial department have a record, at that time, Henan provincial government issued a formal document to give confirmationThat all assessments were reasonable and impartial and did not result in the loss of state capital. In addition, the transfer price of 740 million yuan in the end is not high? Our transfer is based on net assets, at that time the transfer of the price is 4.8 times times the net assets. Is this premium high?　　If in today's stock market, there may be 4.8 times times no one, but at the time of the Shanghai Composite Index 6,000 points, 4.8 times times the premium is far lower than the average price-earnings ratio of the stock market, once the successful listing, the return will be considerable. Whether to increase debt "21st century": according to Zheng Coal Machine prospectus disclosed, October 31, 2007 Zheng Coal machine net assets is 315.77 million yuan, and September 30, 2006 net assets of only 80.7 million yuan, that is, one months a year to achieve net profit of 235.07 million yuan, the average monthly profit of up to 18.08 million Yuan, can 2006 6-September four months of total profit is only 16.94 million yuan.　　Is there a question of concealment of earnings before that? Gio: It's about a debt restructuring we had at the end of 2006.　　At that time, we owed the principal and interest of ICBC 100 million yuan, originally agreed with ICBC, we repay the debt by Principal 40%-50%, but 3 days overdue, this agreement can not be implemented. Eventually ICBC sold the debt to China Great Wall Asset Management Company (hereinafter referred to as the Great Wall Company), the Great Wall company is 18% of the principal of the acquisition of this debt, after the takeover requires us to pay 100% of the principal, and there is an agreement, if within three years to repay the debt,　　Will waive the interest of 137.22 million yuan, eventually we pay off the principal in 2007, so this interest relief will become the profits of the year, so that 2007 years of profit significantly higher than 2006. "21st century": Some experts pointed out that the Great Wall Company in 2006 has exempted this interest debt, why at that time did not deduct in the assessment, so that net assets significantly reduced?　　In addition, when dealing with the debt of the Great Wall Company, why not like many state-owned coal groups, such as the use of debt swaps? Gio: First of all, in 3 years will be able to pay off the principal is still an unknown, if not at that time, this debt is not exempt, so in 2006 this interest is still a liability. As for the way of debt restructuring, we think that as a fully competitive industry such as coal machine, the way of debt to equity swaps is inflexible. You look at today's Yong Coal, that is, Henan coal chemical industry, because of the issue of Debt-to-equity swap, to the present still not on the market.　　Secondly, what kind of mechanism is needed to fully compete and consider whether it is flexible or inflexible to turn over a stock.　　Management stake in the doubt "21st Century": Back to look at 2006 years of restructuring, including management shareholding, and then to the company listed today, you think the mechanism of the reform of the development of Zheng Coal machine What kind of impetus role? Gio: Whether the management of the shareholding, to see what the nature of the enterprise, if it is in the oil, mobile management, such as shareholding, is to use its monopoly status to obtain profits, and if it is a full competition in the industry, capitalProduction is not the name of the public, but also not the name of capital, but through the mechanism of innovation can let the assets to achieve value-added, from these years, the restructuring and management of shareholding mechanism, such as the promotion of the role of innovation is obvious. Before the reform of the 2001 and 2002, when Zheng Coal machine group owed 10 years of medical expenses, owed 8 months of wages, the asset-liability rate reached 116%, due to water charges, electricity, taxes, co-ordination and other large costs, at that time the enterprise to who who do not, for nothing.　　including white to Hebi Mining Bureau, Xishan Mining Bureau and several other enterprises, have been rejected by the other side.　　And after the restructuring, said a comparable example, we have a competitor in the restructuring before we are its 1/3, and a few years, it is our 1/3, equivalent to achieve 9 times times the growth.　　"21st Century": complete set is the development direction of coal machine enterprises, Zheng Coal machine will be acquired or from the establishment of enterprises to achieve? Gio: Coal machine Complete supply, we now have the product has hydraulic support and scraper machine, on the difference shearer.　　Before we have talked about a coal mining machine enterprises, ready to achieve through the acquisition of complete sets of supply, but then did not succeed, mainly at present there is no high-end shearer enterprises, at the same time we can not acquire the industry leading enterprises, that is, through acquisitions will only stay in the low level, meaning little.　　And the implementation of the path may be through with foreign high-end coal machine companies, before the development of high-end hydraulic support, we are also this idea, was rejected by foreign investment. But in the end we have to achieve the foreign capital in China's hydraulic support market all occupied, but also began to enter the overseas market, the cost advantage is very obvious, the same model we price 1.3 million yuan, foreign companies to sell 4.5 million yuan.