One year of private enterprise rescue: some successfully landed and some continued to travel

Although the state-owned asset rescue has been steadily advancing, it can be seen from the public announcements of listed companies that the state-owned asset rescue has generally experienced two rounds of climaxes: in the fourth quarter of last year, the number of control transfer cases of listed private enterprises suddenly increased, and the month on month decline occurred after the Spring Festival; Since May, the cases of private listed companies transferring their controlling rights have rapidly recovered. In the past month, about 15 listed companies have issued suggestive announcements on the change of control rights, of which 9 are state-owned companies.

Tuchong creativity/comparison between Wu and Tu/mapping

Securities Times reporter Wang Xiaowei

Since the first private enterprise in Beijing and Shenzhen was successfully rescued by the state capital in the middle of last year, it will be the anniversary. Over the past year, multiple rescue funds accelerated to enter the market, especially the nationwide rescue led by local governments. More than 100 private listed companies announced that they had been or would be rescued by state-owned funds.

However, many practitioners interviewed by the Securities Times reporter said that while some of the rescue projects were progressing smoothly, some projects also had problems with the connection between the rescue funds and private enterprises, which meant that some private enterprises or actual controllers had successfully overcome the liquidity crisis and enjoyed "non controlling shareholder dividends" after transferring their controlling rights, Another part of private enterprises and their actual controllers will continue to struggle in the situation of tight liquidity.

Happiness of getting out of trouble

Guangxi State owned Assets Assistance Network Technology Co., Ltd., Luzhou State owned Assets Investment in Cross border Communication Co., Ltd.... The number of cases of state-owned assets investing in private listed companies has increased again since June, which means that the liquidity of private enterprises rescued by various state-owned assets is steadily advancing. Some media referred to the new climax of this round of state-owned asset rescue as "the second quarter of the rescue".

Public statistics show that at present, the number of private listed companies that have announced that they have or will be rescued by state-owned assets has already broken 100. The vast majority of private enterprises rescued by state-owned assets told the Securities Times that the company is experiencing positive changes at multiple levels.

Tri environmental protection, which is mainly engaged in energy purification, is one of the first targets of state funded rescue in China. The incorporation of the State owned Assets Supervision and Administration Commission of Haidian District in Beijing enabled the company to have an actual controller for the first time since 2002. Wang Zun, the person in charge of the company, told the Securities Times that the rescue has brought significant positive changes to Sanhua Environmental Protection: "In the short term, the company has solved the two pressing issues of liquidity and high accounts receivable; from a deeper perspective, the company's operation and management model are moving towards optimization."

For many years, when promoting technology, Sanhua Environmental Protection has adopted the mode of building a factory with loans from customers first, and repaying according to a specific account period after the customers have obtained profits. This has led to the growth of the company's revenue, while the scale of accounts receivable has also been increasing, which once caused the outside world to question the company's "capital advance model".

According to Wang Zun, Sanhua Environmental Protection had planned to change such business model and carry out transformation before, but this transformation was not really implemented until the state-owned capital became the owner. "Now the company's projects are not just to make money, but must meet the overall strategic requirements, and even combine with the needs of the national level."

The transformation is accompanied by the scientific decision-making of the company. "Previously, the feasibility of a project was usually judged by the top leaders. After the state-owned assets were taken over, the technical committee, the economic committee and even the SASAC of the district were usually required to review at all levels, and a strict feasibility study report was required to enter the next practical stage. In the new economic environment, this decision-making process is gradually becoming the management advantage of the company." Wang Zun said.

Since almost all of the private enterprises receiving this round of bailouts have suffered from "lack of money", what makes private enterprises feel most after the state-owned capital is liquidity. Through the intervention of state-owned assets in various forms such as shares and bonds, the listed companies and their controllers have achieved "blood transfusion revival".

Sanhua Environmental Protection is a typical case of revival of listed companies. Haidian State owned Assets took out real money and silver to accelerate the resolution of the cash flow problem of Sanhua Environmental Protection through the transfer of accounts receivable and subscription of non-public shares.

In addition, the state-owned asset rescue has brought more obvious changes to the original controllers of private enterprises. With the arrival of rescue funds, the downward trend of high share pledge and high leverage ratio gradually emerged. The relief of liquidity problems and the smooth financing channels are just one of the signs of the improvement of private enterprises after the state capital rescue. In fact, the "happiness of getting rid of difficulties" is still accelerating to penetrate into other levels.

The reporter found in the survey that many private enterprises rescued by state-owned assets are experiencing a series of "serial effects". For example, company S started cooperation with large central enterprises after it was rescued by Beijing state-owned assets last year. The person in charge of the company revealed that after the introduction of state-owned assets, COFCO Group is currently planning to introduce it. "With the" endorsement "of state-owned assets, the company began to make great strides in business development, especially in the business development of central enterprises."

  A year of begging for alms

The original controllers of private listed companies felt the most profound difference brought about by this round of state-owned capital rescue.

Northeast P Company had an equity pledge crisis last year, and became the target of Shandong state-owned assets rescue at the end of 2018. Li Lei, the original actual controller of Company P, became the second largest shareholder after transferring the controlling right. In Li Lei's eyes, from 2018 to 2019, he "seems to have lived for several generations".

"Last year was almost a year of 'begging for alms'. I only did one thing all year round, raising money everywhere every day. During the year, my body and spirit were tortured, and I experienced for the first time the pain and grievances I had never experienced since I started my business." Li Lei confessed.

In Li Lei's opinion, "grievances" mainly come from two points:

One is the new regulation effect. "At that time, I held about 70% of the company's shares, and the proportion of personal pledge was less than 40%. I thought that this way of 'half off and half off' was enough to ensure capital turnover. According to my plan, the profitability of the company can be improved by incubating high-quality projects in vitro and injecting them into listed companies when they mature in the future. Unexpectedly, new regulatory regulations were issued later, especially the policy that stocks with a pledge ratio of more than 50% should not be used as the subject of the pledge for refinancing, which made my pledge ratio become the top bar in an instant. "

Li Lei thought of the way to reduce the pledge ratio by reducing some shares. However, the consulting agency learned that it was also restricted by the new regulations on shareholding reduction. "All of a sudden, I have become unable to repay the pledgee."

Second, financial institutions withdrew loans. "At that time, I made a pledge loan of 400 million yuan, but in 2018, institutions came to me to repay the money. At that time, I thought, I have been doing industry, and I have never violated the rules. Why would I also encounter loan withdrawals? Isn't this equivalent to being removed from the ladder when I just climbed halfway?"

Therefore, it is normal to borrow money and beg alms everywhere. Li Lei spent more time and energy on financing and borrowing last year than he spent on developing new markets for the company and optimizing the company's strategy and operation. The performance of P Company in the first quarter of 2019 also showed a loss for the first time since its listing. "I am determined to transfer the controlling right," Li Lei told the Securities Times.

In the second half of 2018, Li Lei began to contact with local state-owned assets. "At that time, I talked with the State owned Assets Supervision and Administration Commission of Hunan, Shandong and Jiangxi respectively, and these state-owned assets found three rescue target companies, and the price of acquiring our company was the sum of the other two companies. However, since our company had no goodwill impairment, and the debt scale was only about 1 billion yuan, the assets were good, and soon became the key rescue target."

Both private enterprises and state-owned assets hit it off right away, which is related to the satisfaction of their respective needs. One side has equipment and talents, the other side has money and market, and Li Lei and Shandong State owned Assets are highly consistent in the company's strategy and operation ideas. Both sides believe that cooperation can ensure the sustainable and healthy development of P Company.

In Li Lei's view, the foundation of the company's sustainable development lies in liquidity. "The company has had several strategic layouts since its listing, but the financing cost is too high, which limits its development. For example, if the financing cost of a new project we invest in exceeds 10%, it will be difficult for the project to make profits, and if the annual profit is less than 8%, it will reach 5 million yuan, and the cost will be recovered in six years. At present, the major shareholders of state-owned assets have very strong financing capacity and can issue bonds at any time. I hope that the major shareholders can lend money to the company at low interest rates to help the company achieve endogenous development and external mergers and acquisitions. "

Although Li Lei "degraded" to be the second shareholder of Company P, he still actually operated the company. When the reporter asked whether there was any regret after the transfer of control, Li Lei said that "there is nothing".

"I chose to give up my controlling interest solely for the sake of the company's sustainable development," Li Lei said. "Personally, compared with the mature capital market, being a controlling shareholder in A-share companies has more obligations to bear. Now I can see the complementarity of state-owned assets and private enterprises, and see the best state since the enterprise entered the entrepreneurial stage. I am very happy to be the second shareholder."

Difficult contact

However, some private enterprises reported that the proportion of those who enjoyed themselves in the current round of state-owned asset relief was not high. The reporter also found in the survey that a considerable number of private enterprises are still "struggling", and some private enterprises are difficult to accept the conditions put forward by the state-owned capital rescue, which is more likely to occur in the non local rescue.

Since the end of 2018, Company R has negotiated with the state-owned assets of multi-channel rescue, and the number of state-owned assets received by Secretary Liu Qing himself has reached 5 batches. "All kinds of funds have been discussed with the company, but most of them have proposed relocation or actual control requirements, and soon there will be no more information."

Taking the state-owned assets of a city in Hunan Province as an example, Liu Qing introduced that at the beginning, the two sides talked very speculatively, and the other side cared about how big the capital gap of the actual controller was. When it learned that there was only 600 million yuan of equity pledged debt, the state-owned capital immediately put forward the requirement of holding the company. "Later, I learned that there were a number of companies listed in the city in the 1990s, and there were no new IPO projects in recent years. After the realization of control, the company would be required to move to the city in the next step, which we explicitly refused."

A state-owned asset platform in Shandong also came to R Company, which promised the company that the annual profit scale of the state-owned asset platform itself would reach 1 billion yuan, and the total assets would also reach 100 billion yuan. On hearing this, Liu Qing judged that after receiving the rescue from the state-owned asset platform, he would definitely merge the tables, so he politely refused.

"In addition to the requirements of actual control and relocation, there are also some state-owned asset platforms that propose higher return on capital, which is also something the company cannot promise. Although we have contacted and discussed with many state-owned asset parties, no formal agreement has been signed yet." Liu Qing judged from his personal experience that a large proportion of the rescue negotiations are difficult to succeed.

Su Peike, the chief researcher of the Public Policy Research Institute of the University of International Business and Economics, told the Securities Times that after the establishment of multi region rescue funds, the rescue targets were not limited to local enterprises, but aimed at the whole country. The reason why the transaction is difficult is that some conditions are usually tied in the process of state-owned capital rescue, which leads to the unacceptability of many major shareholders of private enterprises. "If the quality of private enterprises is poor, state-owned assets will not be included in the rescue consideration; if it is a high-quality enterprise, it will take a negotiation step, considering whether equity intervention or debt intervention. Relatively speaking, debt intervention is more acceptable for private enterprises, while equity intervention, especially the expectation of holding shares, will be considered by some private entrepreneurs as' to grab shares'."

Then, why can't the actual controller of private enterprises transfer the actual control right like Company P? Su Peike said it is related to many factors. "The shells of A-share companies are valuable. If they lose the controlling right, it often means that the original controller and his entire team will probably leave the company completely."

However, the reporter found that it is not uncommon to retain the actual operation right of the original team in this round of state-owned asset rescue. For example, Shanhe Intelligent, one of the "troika" of Hunan construction machinery, was incorporated into the state-owned assets of Guangzhou. The directors of Guangzhou Wanli assigned to the company had made it clear that Shanhe Intelligent should ensure "three invariants" at the level of main business, team and registered place.

In fact, while some private enterprises do not accept it, they also have concerns about bailing out state-owned assets. A person in charge of state-owned assets in East China introduced that "our platform has a clear picture of the rescue enterprises: we mainly choose the rescue target in the advantageous characteristic industries, and focus on high-tech enterprises and leading listed companies in strategic emerging industries, advantageous traditional industries, modern supply chains and other fields. However, on the one hand, the scale of the platform's own rescue funds is not enough to cover all high-quality enterprises in distress; On the other hand, some companies regard the bailout funds as "pie falling from the sky", and do not want to take money for nothing, but do not want to assume corresponding obligations. In the cases we have contacted, there are major shareholders whose equity pledge financing is not used in the real economy. The equity pledge crisis is self inflicted. Why should the rescue fund help him? "

As some rescue transactions are difficult to reach, some private enterprises will continue to trudge in a relatively tight liquidity environment. It is still normal to attack in all directions to seek a rescue.

Liu Qing of R Company admitted that 2019 will be the most difficult year in the company's history. Since no suitable state-owned assets have been negotiated so far, the debt crisis of the actual controller has not been lifted. "The new regulations on shareholding reduction introduced earlier have nearly blocked the way of block trading, which is one of the reasons for the high proportion of the company's major shareholders' stock pledge. At the highest point, the actual controller has a stock pledge of 1 billion yuan, which is used to incubate projects in vitro in R company. These pledges have costs, and the minimum cost is 5% to 6% of the annual cost, and the annual interest payment is about 60 million yuan. In the economic growth downturn cycle, what can you make so much money by investing? "

What's worse, due to the loss of net profit for two consecutive years, the stock of Company R has been handled by the Exchange * ST, and financial institutions are unwilling to pledge the company's stock.

Liu Qing pointed out that if the company's shares were not * ST, it would be easy to solve the liquidity of the actual controller. "On the one hand, the actual controller has been reducing the pledge ratio through other ways, and the total debt has now dropped to about 600 million yuan; on the other hand, with the opening of the science and technology innovation board, some of the company's assets invested by the actual controller before have been securitized, and the liquidity crisis relief is expected to speed up. Whether the difficulties of 2019 can be successfully overcome will determine the fate of the company in the next few years."

How to really "quench thirst"?

Although the state-owned asset rescue has been steadily advancing, it can be seen from the public announcements of listed companies that the state-owned asset rescue has generally experienced two rounds of climaxes: in the fourth quarter of last year, the number of control transfer cases of listed private enterprises suddenly increased, and the month on month decline occurred after the Spring Festival; Since May, the cases of private listed companies transferring their controlling rights have rapidly recovered. In the past month, about 15 listed companies have issued suggestive announcements on the change of control rights, of which 9 are state-owned companies.

In Su Peike's view, this reflects the changes in China's economy and market environment. "In the last round of tightening cycle, the most active private enterprises were often trapped. Whether from the perspective of state-owned capital rescue or the recent frequent integration of central enterprises with local state-owned enterprises, the role of state-owned assets has become increasingly important. However, it is worth noting that from the historical experience, whenever the vitality of small enterprises has increased significantly and private enterprises have increased mergers and acquisitions, it often indicates that the economic innovation is sufficient and the survival environment for private enterprises is good; On the contrary, the increase in mergers and acquisitions of large enterprises and the difficulty in solving the crisis of small enterprises often reflect the weakening of market innovation. "

However, the reporter found that some state-owned assets have been deployed to ensure the innovation capability and mechanism flexibility of private enterprises while bailing out. For example, some cities have made it clear that the state-owned assets to rescue private enterprises can neither completely let go nor excessively interfere in the operation, so as to maintain the flexible operation mechanism of private enterprises, which is also conducive to ensuring the preservation and appreciation of state-owned assets.

"Rescue without poverty" has always been regarded as an important principle of this round of state-owned capital rescue. For this principle, Wu Qingbin, Chairman of Zhongtai Trust, has publicly explained that: first, if we do not save backward industries, backward production capacity should exit; Secondly, save "good people" rather than "bad people". If the boss of an enterprise is a good person with credit, he should be saved. If the boss of an enterprise is not serious, he cannot be saved. "As long as China saves good entrepreneurs, its economy will be transformed in two or three years".

However, some insiders believe that this principle will face some challenges when it is implemented. The aforementioned person in charge of S Company said, "From the case I personally contacted, in practice, state-owned assets are more inclined to rescue the local enterprises with the greatest influence in employment, products, brands, etc.; for enterprises that really have core technologies but have not grown up, state-owned assets rescue needs to go through layers of approval procedures, and these enterprises are difficult to get timely rescue."

The solution proposed by Liu Qing is that funds with different risk preferences should be allowed to choose projects with different risks. "The model of the bail-out party should be to make a lot of money on several projects, and should also allow some projects to lose money. Only in this way can we truly free up state-owned capital and more effectively rescue the liquidity of private enterprises."

Wang Zun also pointed out that the state-owned asset rescue should adhere to the combination of short-term benefits and long-term benefits. "There have been some cases in the market before that. Some enterprises are not high-quality assets. When the state-owned assets bailed them out, the major shareholders reduced their holdings and left. In fact, these companies should exit the market, instead of retaining the assets that should be invited out or exited in the name of bailing out, so that their low-quality development can affect the economy. The medium-term goal of the rescue must be to restore the hematopoietic function of enterprises, so we must not choose bottomless zombie enterprises. "

The reporter noticed that some private enterprises are trying to quench their thirst in the short term and in the medium and long term. Take Shenzhen State owned Assets, which took the lead in action, as an example, its rescue funds are called "mutual aid funds". Shenzhen's state-owned capital rescue is not just a timely help in terms of capital. For example, after its investment in Eternal Asia, it jointly launched the establishment of relevant industry funds to support innovative enterprises cooperating with Eternal Asia to settle in Shenzhen, and support enterprise development with the help of government policies and resources.

Liu Qing told the Securities Times that private enterprises committed to sustainable development must hope for the combination of long-term and short-term benefits. "Although short-term emergency measures are very important, we should not mistake these strong points for medium - and long-term reform policies. To solve the problems of difficult and expensive financing of private enterprises and the development of the private economy, in addition to relief, we need deeper reform."

(Companies P, R and S in the article are all A-share listed companies; at the request of the interviewee, all the persons in charge of the company in the article are pseudonyms)