Bishuiyuan (37.SZ), a leading water treatment company, has recently added a new round of capital operation.

On the evening of July 26th, it was announced that China Urban and Rural Holding Group Co., Ltd. (hereinafter referred to as China Urban and Rural), the controlling shareholder of Bishuiyuan, issued a partial tender offer to all shareholders of Bishuiyuan except the purchaser and its concerted actors. The tender offer price was 6. yuan/share, and the number of tender offer shares was 47 million shares, with a total investment of 2.44 billion, which increased the company's share ratio by 11.23%.

From 219 to 221, China Urban and Rural China Communications Fund held a total of 22.17% shares of listed companies through equity transfer, non-public offering and other measures, and entrusted 28 million shares of Bishuiyuan with voting rights, that is, 7.74% shares with corresponding voting rights, making the total holding company 29.9%.

after the completion of this tender offer, China urban and rural people acting in concert will further increase the holding rate to 33.4%.

For the purpose of issuing tender offer, the announcement points out that the purchaser is optimistic about the future development prospects of listed companies, and intends to increase the shareholding ratio of listed companies through this tender offer, give play to the advantages of mixed ownership, and promote the business development of listed companies, enhance their competitive strength and realize the amplification effect of state-owned capital with the help of the resources and strength advantages of China urban and rural areas and China Communications Group.

Generally speaking, the major shareholders of listed companies who have obtained nearly 3% equity have no incentive to further improve their control rights. An investment banker who has been involved in M&A and restructuring projects all the year round told reporters that only some companies with 3% equity and one-vote decision system can shareholders increase their holding proportion for the sake of control rights. But it is clear that Bishuiyuan does not have such a company charter.

if it is not for the consideration of control rights, then what is the purpose of issuing tender offer in urban and rural areas of China?

frequent cashing of shareholders

According to the Progress of Performance Compensation Commitments disclosed by Bishuiyuan on July 22nd, in May, June, 219 and March, 221, four shareholders of the company, namely Wen Jianping, former chairman and actual controller, Liu Zhenguo, former vice chairman, Chen Yili, former supervisor of the company and Zhou Nianyun, respectively signed the Share Transfer Agreement with China, the current controlling shareholder of the company, and agreed.

Since then, Bishuiyuan has triggered the compensation obligation because its performance is not up to standard. As of the announcement date mentioned above, the four people's outstanding performance commitments totaled 1.3 billion yuan, including 458.4 million yuan, and the outstanding amounts of Wen Jianping, Liu Zhenguo, Chen Yili and Zhou Nianyun were 31 million, 13 million, 16.28 million and 1.72 million respectively. In addition, Liu Zhenguo's previous performance compensation was paid by his ex-wife Wang Xueqin, and the amount paid was 22 million.

Wen Jianping and Wang Xueqin are the top ten tradable shareholders of the company so far, and both of them have been cashing in the company's shares this year, which has affected Bishuiyuan's share price, which has fallen by nearly 3% this year to a minimum of 4.14 yuan.

On June 17th this year, Bishuiyuan announced that Wen Jianping's shareholding was once again frozen by the judiciary. Wen Jianping currently holds 41 million shares of the company, accounting for 11.8%, but has pledged and frozen 212 million shares, accounting for 5.85%. On the same day, Wen Jianping terminated this round of reduction plan ahead of schedule.

the credit situation of the compensation obligor is worrying, but the tender offer is a tonic. As of the close of July 27th, Bishuiyuan closed up 9.96% in the day, and its share price rebounded to 5.63 yuan.

Many tender offers are unsuccessful in the end. Generally, when the tender deadline approaches, the price difference between the market price and the tender offer price will converge or even exceed, resulting in that retail investors often have no incentive to participate in the tender offer at the last moment. The above-mentioned investment banker told reporters: However, if important shareholders participate in the tender offer, it can not only ensure the tender offer will finally take place, but also activate the liquidity of the secondary market, which will also help shareholders to cash out and repay performance compensation to some extent.

In addition, the investment banker also pointed out that China urban and rural areas did not directly agree to accept the shares of the aforementioned shareholders, but adopted a partial tender offer, mainly to avoid triggering a comprehensive tender offer.

As the proportion of urban and rural shares in China is close to 3%, a large amount of negotiated transfer will trigger a comprehensive tender offer. Although the general meeting of shareholders of the company will generally waive the comprehensive offer, the acquirer still needs to match the corresponding capabilities before being allowed to trigger the whole matter. The person told reporters.

revitalizing assets

Bishuiyuan's projects in some towns and villages can't be promoted because of the problem of capital chain, and there are many unfinished projects, so nearly half of the expected income can't be recovered. A person familiar with Bishuiyuan's business told reporters that the company's financing potential depends on the stock price. Whether it is equity financing or debt financing, the stock price is collateral, so it is difficult for companies without investors to be revitalized.

In p>219, A-share environmental protection enterprises faced liquidity difficulties one after another, including a number of companies inviting state-owned enterprises to endorse. In July 219, Bishuiyuan actually controlled Wen Jianping to transfer 32 million shares to China urban and rural areas, and the latter became a strategic investor of the company. In December, 221, China urban and rural areas obtained 29.9% of the company's shares by issuing 469 million shares and being authorized to vote, and replaced Wen Jianping as the controlling shareholder.

however, if we refer to the fixed price of 7.72 yuan/share at that time, the fixed investment in urban and rural areas in China has already experienced a large floating loss.

Bishuiyuan, which once had a market value of nearly 1 billion yuan, was once a highly respected environmental protection technology enterprise in the market because of its unique membrane sewage treatment technology.

Capital Securities once pointed out in the research report that Bishuiyuan has comprehensive core technologies and independent intellectual property rights in the three key areas of membrane technology applied to water treatment technology, membrane assembly equipment technology and membrane material manufacturing technology, and has successfully invested in large-scale production and application, and the key core technologies are at the leading level in the industry. The company is one of the few companies in the world that can produce PVDF lined reinforced hollow fiber membrane on a large scale, and its output ranks among the top in the world. At the same time, the company can directly treat sewage into high-quality reclaimed water of Class II or III surface water through independent innovation MBR-DF technology. It is the only high-tech enterprise in China that has this technology and completed large-scale engineering application.

in may this year, bishuiyuan also won the bid for the lithium extraction project of Qinghai membrane technology of Minmetals salt lake company, which is considered to be expected to be seamlessly spliced into the upstream field of new energy.

although the related technologies are mature, the characteristics of PPP business have caused the company to bear a lot of upfront costs and liquidity burdens.

in November p>217, the Ministry of finance issued document No.92, which focused on cleaning up local PPP projects that did not meet the requirements of the specification. After the PPP project was restricted, the financing environment of Bishuiyuan further deteriorated, and the pressure on interest-bearing liabilities surged.

After being invited into CCCC to become the controlling shareholder, the pressure of interest-bearing liabilities of Bishuiyuan was slightly reduced, but the total amount was still huge, making it difficult to start other equity financing methods.

The annual report of p>221 shows that the total amount of short-term loans, notes and accounts payable of Bishuiyuan is 5.41 billion yuan, long-term loans are 18.169 billion yuan, and interest expenses are 1.3 billion yuan. In addition, the company's accounts receivable amounted to 9.685 billion yuan, and the external guarantee reached 32.6 billion yuan, accounting for 129.21% of the net assets at the end of 221.

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