Mengniu mainly bets with foreign companies. The winning bet is its own. If it loses, it plays the "national card", hoping to win both sides. The gambling product is too bad, so it is disgusting. Here is an article reprinted to understand what "betting" is.

, for reference. Mengniu's 3 billion fund gap incident revealed "gambling agreement" 2008-11-05 09:49:55 Hexun----------------------

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-------- The application of "gambling agreement" in Chinese enterprises In recent years, more and more private enterprises have tried to use the power of foreign capital to list overseas in order to seek broader development space, so "vending agreement"

"Gambling Agreement" has gradually come into people's view and caused a lot of controversy in the media.

A correct view of this issue will help more companies rationally apply the game rules of the market economy and create possibilities for their own rapid development.

1. The current situation of the application of “vambling agreement” in my country The signing of “vambling agreement” is very common abroad, but it is still a new term in China.

The earliest gambling case in China is the "gambling agreement" signed between Mengniu and Morgan Stanley, CDH, and Actis Investment in 2003. The agreement stipulated that if within three years from 2004 to 2006, Mengniu Dairy's earnings per share compounded

If the annual growth rate exceeds 50%, the three institutional investors will transfer up to 78.3 million shares to Jinniu; conversely, if the annual compound growth rate does not reach 50%, Jinniu will transfer up to 78.3 million shares to institutional investors.

, or pay the corresponding cash to it.

Because the performance far exceeded expectations, in April 2005, three financial institutional investors terminated the agreement early by paying Golden Bull convertible notes with a principal amount of US$5.9876 million.

(Note: Jinniu is a shell company registered by Mengniu for overseas listing) In 2004, Harbor Networks signed a "betting agreement" when accepting capital injection from Warburg Pincus, stipulating that once Harbor Network failed to achieve sustained growth sales targets, the investment

Party will receive more equity.

At the same time, it is stipulated that once Harbor fails to be listed, President Li Yinan and other management teams will lose control of the company.

Due to factors such as fatal blows from competitors and mistakes in strategic formulation, Harbor Company failed to go public twice and was eventually acquired by Huawei in May 2006.

In September 2005, when Yurun was listed in Hong Kong, it also signed a gambling agreement with Goldman Sachs, CDH Investments and Singapore Investment Company PVP Fund: If Yurun's profit in 2005 does not reach 259.2 million Hong Kong dollars, investors have the right to demand large profits.

Shareholders redeem their shares at a market premium of 20%.

In March 2006, Yurun Food announced its first annual report after its listing, showing that its net profit reached 360 million yuan, far exceeding the minimum limit for gambling with foreign capital.

Therefore, according to the "gambling agreement", foreign investors can cash out after one year of listing.

Yongle was listed in Hong Kong in October 2005, and its gambling agreement with Morgan Stanley and CDH immediately attracted people's attention. The agreement stipulated that if Yongle's net profit in 2007 (can be extended to 2008 or 2009) is higher than

750 million yuan, institutional investors will transfer 46.9738 million shares of Yongle shares to Yongle management; if the net profit is equal to or lower than 675 million yuan, Yongle management will transfer 46.9738 million shares to institutional investors; if the net profit is not higher than

600 million yuan, Yongle management will transfer up to 93.9476 million shares to institutional investors.

However, after the agreement was signed, Yongle's performance fell far short of the agreed standards, and it suffered economic intervention from foreign shareholders. It was eventually merged by its competitor Gome Electrical Appliances in July 2005.

In October 2005, when XCMG Group signed an equity transfer agreement with Carlyle Asia Investment Fund, it adopted a gambling agreement for the new capital injection: if XCMG Machinery reaches the agreed profit target in 2006, Carlyle will acquire 85% of the equity.

The capital contribution will increase by US$60 million.

However, in October 2006, as XCMG Machinery's profitability had been basically determined, the two parties canceled the gambling agreement in the revised agreement.

2. The meaning and essence of the VAM agreement. The VAM agreement (Valuation Adjustment Mechanism, VAM), that is, the "Valuation Adjustment Agreement", is an agreement between investors and financiers to deal with uncertain future situations when they reach a financing agreement.

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If the company's future profitability reaches a certain standard, the financier will have certain rights to compensate for the loss of underestimation of the company's value; otherwise, the investor will have certain rights to compensate for the loss of overestimation of the company's value.

This is the "valuation adjustment agreement", also known as the "gambling agreement."

The gambling agreement brought huge benefits to Mengniu and Yurun, and also indirectly led to the merger of Yongle and Harbor.

Therefore, some people say that the essence of "gambling agreement" is a high-risk, high-yield option incentive method; others say that the essence of "gambling agreement" is to stimulate the gambling nature of corporate management.

These statements are somewhat one-sided.