Cai Xuefei, a liquor analyst, told China first finance and economics that Fosun Group’s strong pressure on local capital to win the shares of Tuopai shede group held by Tianyang holdings shows that the former’s investment in liquor field is very firm.
The new ownership of shede liquor (600702. SH) is finally settled.
On the morning of December 31, after a short time of quotation, Fosun Group beat Suining Xingye Investment Group and other competitors with a price of 4.53 billion yuan, won 70% of the shares of Tuopai shede group held by Tianyang Holding Group Co., Ltd. (hereinafter referred to as “Tianyang holding”), and became the new owner of shede liquor industry. In the view of the industry, five years ago, Fosun Group participated in the fight for the equity of Tuopai shede group, and in the past two years, Fosun Group has also invested frequently in the wine industry.
On the morning of the same day, Wang Jiaquan, the successor of Suining Juxin Auction Co., Ltd., told China first finance and economics that the auction was conducted offline instead of live online. According to people at the auction site, the whole auction process was very short and the results were quickly separated, but the results were not released at the scene.
Subsequently, the official website of Pengxi County People’s court announced the auction results. After the auction was announced, more than 20 units in and outside the province consulted and inquired information, but only 3 units were involved in the auction. After 27 rounds of auction, the bid winner of the Yu Garden shopping mall in Shanghai (group) Limited by Share Ltd finally won the bid at 4 billion 530 million yuan.
At the time of the first financial reporter’s release, ST shares (600702.SH) were 93.23 yuan, up 3.66%, while Yu Garden shares (600655.SH) quickly rose to a daily limit of 8.89 yuan.
Tianyang holdings acquired shede in August 2015. After 203 rounds of bidding, Tianyang holdings won 70% equity of Tuopai shede group with RMB 2351 per share and total price of RMB 3822 million, thus indirectly holding 29.91% shares of shede liquor. Now the purchase price of 4.53 billion yuan is not much higher than that of that year.
Founded in 1993, Tianyang holdings is a large holding group involved in cultural industry, consumer goods, science and technology industry, financial investment and other industries.
At that time, it was just the right time for Tianyang holdings to win shede. After the in-depth adjustment of the industry from 2013 to 2015, the valuation of liquor was at a low level. Since 2016, the domestic liquor industry has shown a rapid recovery, and shede liquor industry also has a rapid growth. In 2019, shede liquor industry has realized an operating income of 2.65 billion yuan, and has 1.6 billion yuan of monetary capital.
Since 2019, Tianyang holding, which is short of funds, has also focused on shede liquor, which has abundant funds.
On August 19, 2020, shede liquor announced that Tianyang holdings and its related parties occupied the capital of shede liquor for non business purposes, with a cumulative amount of about 2.16 billion yuan in 2019 and 1.85 billion yuan in 2020. As of August 19, 2020, shede liquor has not recovered the capital principal and interest of about 475 million yuan.
In the announcement of St shede on December 29, Suining Public Security Bureau also announced the occupation of some funds.
In June 2018, shede liquor, Tianyang investment and Tuopai shede group jointly increased the capital of Tianying chain factoring company by 350 million yuan, which is mainly the factoring business of accounts receivable of upstream suppliers in the supply chain, and strengthened the management of accounts payable of shede liquor. However, in actual operation, the capital demanders are all from Tianyang holding and its related companies. As of November 19, 2020, the balance of factoring due from Tianyang holding and its related parties of Tianying chain factoring is about 405 million yuan (all the funds of Tianying chain factoring).
Previously, Tianyang holdings had agreed to repay the debt before September 19, but failed to achieve it as scheduled. On November 27, Shehong County People’s government, the second shareholder of shede group, took back the control of Tuopai shede group, and promoted the judicial disposal procedure for Tianyang holdings holding shares in Tuopai shede group.
Before the auction, the industry also had a lot of speculation about the bidders, including China Resources Group, Fosun Group and Sichuan liquor group, which were considered as potential buyers.
Among them, the most popular is China Resources Group, which is a large state-owned enterprise with businesses in retail, beer, electric power and other fields. In February 2018, through its company Huachuang Xinrui 5.16 billion yuan, it acquired 11.45% equity of Shanxi Fenjiu and became a strategic investor of Shanxi Fenjiu.
However, it’s not surprising that Tuopai shede group’s 70% equity eventually fell to Fosun Group. At that time, tuoxing liquor group and Shixing liquor group failed to win back the shares of Hubei liquor industry in 2012.
In the past two years, Fosun Group has invested heavily in the liquor industry. At the end of 2017, Fosun international took over 17.99% of H shares of Qingdao beer held by Asahi group at the price of HK $27.22 per share, becoming the second shareholder of Qingdao beer. On May 28, 2020, Fosun International acquired about 30% shares of Jinhui wine at the price of HK $1.836 billion, and then further increased its shareholding to 38%.
Cai Xuefei, a liquor analyst, told China first finance and economics that Fosun Group’s strong pressure on local capital to win the shares of Tuopai shede group held by Tianyang holdings shows that the former’s investment in liquor field is very firm. Fosun Group obviously has a big strategy in the field of liquor industry. Before the acquisition of Jinhui liquor, it hoped to make use of liquor to complete its consumption business layout; while this acquisition of shede, it intended to use shede’s identity as a national famous liquor to strengthen its reputation in the liquor industry.
It is worth noting that for Tianyang holdings, whether the proceeds from equity auction can be obtained is still unknown.
Shen Meng, executive director of Xiangsong capital, told China first finance and economics that both the control of Tuopai shede group and the auction are completely in the hands of Shehong county government. Therefore, the proceeds from the equity auction will be largely used by the government to deal with various disputes of Tianyang holdings.
According to the enterprise investigation information, the equity of Tuopai shede group held by Tianyang holdings was frozen by Langfang intermediate people’s Court of Hebei Province, Beijing Second Intermediate People’s court, Suining intermediate people’s Court of Sichuan Province and Changsha intermediate people’s Court of Hunan Province.