According to people familiar with the matter, the funds mainly come from "payments" from dealers.
On December 1, Jiaduobao Group announced on its official account that Jiaduobao had repaid the 1.5 billion yuan owed to COFCO Packaging (0906.HK) for the repurchase of equity in the concentrate plant. payment. On the afternoon of November 30, Jiaduobao renewed its strategic cooperation agreement with COFCO Packaging at the headquarters of COFCO Fulinmen.
As can be seen from the on-site pictures, not only the recipient COFCO Packaging was happy, but also Jiaduobao signing representatives including Jiaduobao Group Chairman Wang Jinchang, President Li Chunlin and other Jiaduobao signing representatives were also smiling. It really proves once again the old saying, "There are no eternal enemies, only eternal interests."
In this situation, it is hard to imagine that the two sides were at war with each other two years ago.
Pay off the debt
In October 2017, Jiaduobao, which had a hard time fighting with Wanglaoji, embraced the central enterprise and decided to launch in-depth cooperation with COFCO Packaging. The latter increased its investment by 2 billion yuan in Qingyuan Jiaduobao Herbal (the concentrate factory, the core asset of herbal tea), becoming the second largest shareholder holding 30.58% of the shares.
Just when everyone thought Jiaduobao was making a comeback, on July 6, 2018, COFCO Packaging suddenly issued an announcement stating that Wanglaoji Company, a subsidiary of Jiaduobao, failed to provide trademarks as agreed. COFCO Packaging Filed an arbitration application against Hong Kong Wong Lo Kat Company to the Hong Kong International Arbitration Center. At this point, the two sides "turned against each other" and the conflict officially broke out.
According to COFCO Packaging at the time, COFCO Packaging had stopped supplying cans to Jiaduobao as early as the second quarter of 2018. Based on this calculation, the honeymoon period for both parties is less than half a year. What's more, before the summer herbal tea sales season comes, COFCO's move on Jiaduobao is undoubtedly a fatal blow.
The deadlock was not broken until Wang Jinchang, the veteran of COFCO, joined. On January 1 last year, Wang Jinchang, who had previously served as executive director and chairman of the board of directors of COFCO Packaging, "airborne" to Jiaduobao and assumed the position of chairman of the group. Subsequently, Jiaduobao executives underwent a major change, and Jin Jichuan and Xu Wei were appointed as the group's chief financial officer and chief operating officer respectively.
After more than a year of fighting, the Hong Kong International Arbitration Center issued an award on October 31, 2019, confirming that the application of Wanglaoji Company, a subsidiary of Jiaduobao Company, to terminate the capital increase agreement is invalid and must be completed in accordance with the capital increase agreement. Regarding the relevant procedures for injecting the Jiaduobao trademark into Qingyuan Jiaduobao, COFCO Packaging must immediately compensate COFCO Packaging for 230 million yuan and pay interest of 7.73 million yuan.
Subsequently, the two parties "reconciled" and Jiaduobao said it was willing to pay 250 million yuan in earnest money, but things took a turn for the worse again.
On April 28 this year, Jiaduobao Group signed an equity repurchase agreement with COFCO Packaging. Jiaduobao Group repurchased the 30.58% stake held by COFCO Packaging in Qingyuan Jiaduobao Herbal Technology Co., Ltd. for 1.743 billion yuan, which means that it has completely withdrawn from cooperation at the equity level.
According to the agreement, Jiaduobao (Tianjin) needs to repurchase the 30.58% equity held by COFCO Packaging Investment in Qingyuan Jiaduobao Herbal from COFCO Packaging Investment, with a total amount of 1.505 billion yuan, subject to a deposit of 2.5 billion, the first phase is 500 million yuan and the second phase is 755 million yuan. The second installment must be paid to COFCO Packaging before July 31, 2020. In addition, Qingyuan Jiaduobao Herbal has committed to dividends*** totaling approximately 238 million yuan, which will be paid in seven installments and must be paid before December 31, 2021.
Li Chunlin, President of Jiaduobao, said at the time that the equity buyback was completed on the basis of friendly negotiations and full communication between the two parties. It was a "win-win plan" that would not only further consolidate and enhance the strategies of both parties. Cooperation will also enhance the guarantee of Jiaduobao's upstream tank supply, improve scale efficiency, and achieve the strategic goal of Jiaduobao's successful listing at an early date.
However, for Jiaduobao, which has always had a tight capital chain, where the money to buy back shares comes from is a big problem.
It was not until December 1 that Jiaduobao stated to the public that the company had “repurchased all the target equity under the agreement for a total consideration of approximately RMB 1.5046 billion, as well as promised dividends for the first and second phases* **RMB 50 million has been fully paid to COFCO Packaging.
"
In addition, COFCO Packaging also issued an announcement on the evening of October 30 to confirm, "As of the date of this announcement, the Group has received the full consideration of RMB 1,504,631,126 for the repurchase of the target equity under the repurchase agreement. , and the first and second phase promised dividends totaling *** RMB 50,000,000. ”
Is the listing expected?
An insider close to Jiaduobao’s senior management told the 21st Century Business Herald reporter that the funds used by Jiaduobao to repurchase shares this time are mainly from distribution.
According to him, Jiaduobao raises funds specifically for dealers, with a minimum investment threshold of 20 million yuan. “Some large channel merchants are very enthusiastic, after all, they have followed Jiaduobao for so many years. We have made money and have a foundation of trust in each other. Two dealers I know in Luoyang and Wuhan both invested 20 million. " He said.
As for what rights these "payment" dealers will have in the future, whether they will receive goods at a lower discount or participate in the company's future listing plan, the above-mentioned person did not elaborate further.
However, a reporter from the 21st Century Business Herald found that in the latest report, Jiaduobao still has not given up its plan to go public in Hong Kong.
“Jiaduobao is planning an overall listing to build a new company. Jiaduobao herbal tea has become an internationally renowned brand. "The company said that in 2018, Jiaduobao's management implemented strict reforms, formulated new strategies, actively expanded market space and found new profit growth points. In 2019, the group achieved substantial profits. Under the severe impact of this year's epidemic, operations The performance still exceeded expectations.
The above-mentioned insider told reporters that Jiaduobao’s biggest sales season every year is the Spring Festival Dadidu gift promotion. Judging from the current order status, this year’s Spring Festival promotion will definitely exceed last year’s. “Jiaduobao’s profits were good last year, but due to the impact of the epidemic this year, this year may be regarded as the first year of data (listing). "He said.
According to the WeChat chat screenshot he showed to reporters, regarding this repurchase, Jiaduobao President Li Chunlin said, "Jiaduobao successfully repurchased the Jiaduobao concentrated juice held by COFCO Packaging 30.58% of the shares and signed a new strategic cooperation agreement, clearing the biggest obstacle to listing. ”
It is worth mentioning that in addition to paying off the debt, Jiaduobao also signed a five-year strategic cooperation agreement with COFCO Packaging.
According to the agreement, Jiaduobao promises: Use COFCO Packaging as the group's required packaging products and the first and main supplier, and COFCO Packaging's share shall not be less than 70%-80% of the group's total procurement of packaging products; Jiaduobao uses two-piece cans, PET or other beverage packaging When new can types are produced, COFCO Packaging will give priority to supplying them under the same conditions.
COFCO Packaging also promises to give priority to Jiaduobao Group’s packaging needs and actively follow up production with reference to Jiaduobao Group’s strategic development plan. Lay out and provide efficient and comprehensive packaging services in a timely manner; establish a communication mechanism with Jiaduobao Group in advanced manufacturing, product innovation and technology research and development to ensure the leading position of Jiaduobao Group’s product packaging product technology.
It is not difficult to find that in terms of the content of the commitments between the two parties, Jiaduobao directly clarifies the total annual purchase amount, which is more substantial than COFCO’s “priority guarantee” and also highlights the negotiating position of both parties.
Affected by the news, as of the closing price at 4 p.m. on December 1, COFCO Packaging's share price was HK$3.62 per share, an increase of 3.43%, and the total market value was HK$4.031 billion.
After the previous battle between the two heroes, now. The industry has different opinions on how big the domestic herbal tea market is. The only thing that is certain is that under the influence of the epidemic this year, the herbal tea market has been further suppressed. Revenue from the health business, with Wong Lao Kat herbal tea as its main source of revenue, was 4.501 billion yuan, a year-on-year decrease of 23.11%.
Currently, Jiaduobao has sufficient distribution in Southwest and North China, but in Wong Lao Kat’s base camp, South China. The region can almost be said to have disappeared.
China Food Industry Analyst Zhu Danpeng analyzed that without the endorsement of COFCO, if Jiaduobao wants to be listed in Hong Kong, in addition to capital and scale, it will also have to face the legacy of the past. The historical question is, "The former chairman of Jiaduobao and the company's major shareholder abandoned bail and absconded. Will this affect the Hong Kong stock market?" This is unknown. ”