Two titanium white powder dragon enterprises to negotiate restructuring

China Coatings Network
:
recent years, the rapid development of the domestic
coatings
industry,
titanium dioxide
industry development catalyst. But at the same time of rapid development, the problem of overcapacity also comes, titanium dioxide industry merger and reorganization is inevitable. In 2009 and 2014, two shock IPO failures, titanium dioxide industry leader Longyu titanium industry is making a comeback, and another way to seek a listing. On the evening of May 5, Shenzhen Stock Exchange listed company Yulilian (002601.SZ) announced that the company is in talks with long-time titanium industry restructuring. If the marriage of The titanium industry can be successfully married, it will undoubtedly make the domestic titanium dioxide industry from the birth of a "Big Mac". Statistics show that the production of titanium dioxide in the long-term titanium industry has been the highest in china for many years, and in 2014 the company rose to second place, with a total output of about 500,000 tons, three times that of the industry's top three nuclear titanium whites (002145.SZ). The integration also brought the industry's merger and reorganization drama to a climax. In September last year, China Nuclear Titanium White paid 62 million yuan for a 100% stake in Gansu Oriental, opening the door to an industry reshuffle. Last October, Cristal bought a stake in Jiangxi. The restructuring of the company and long-term titanium industry will be the third example of industry consolidation and will be the highest transaction amount. The two companies have been fighting a price war in the evening of May 5, the company said in a statement that the company is planning a major matter, the matter involves industrial integration, the target is long-term titanium industry. Due to the large scale of assets in the titanium industry, due diligence, audit, evaluation and other heavy workload, the company's stock will continue to be suspended. What kind of enterprise is the titanium industry? Industry and commerce data show that the company was established in February 2001, registered in Mianzhu, Sichuan, registered capital of 1.2 billion yuan. In September 2005, long-term titanium industry completed the share reform, the original more than a dozen shareholders, now plans to reduce to five, respectively, Long-Yuan Investment, Long-Yuan Group, Li Jiaquan, Fan Xianguo, Chen Kaiqiong. Among them, Longyu Investment is a subsidiary of Longyu Group, so the controlling shareholder of Longyu Titanium Industry is Longyu Group, the actual controller is Li Jiaquan. Longyu titanium industry has a production capacity of 300,000 tons / year of titanium dioxide, of which Sichuan Mianzhu base has 200,000 tons / year, Hubei Puyang base has 100,000 tons / year. According to data from the Titanium White Powder Branch of the China Coatings Association, the company's titanium dioxide production in 2012-2014 was 180,200 tons, 240,000 tons and 298,000 tons, respectively, ranking first in the industry. Longyu titanium industry titanium dioxide production and sales not only in the domestic first place, exports are also the leader. In the past two years, their average monthly export volume is more than 10,000 tons. Therefore, their price of titanium dioxide has been the industry's weather leader. "Dragon titanium industry has twice sought to go public, unfortunately failed. The first occurred in 2009, when the head of the company's president's office had told the media: "We are the industry's leading enterprises, the performance of good, obvious to all." Personally, all of these materials are completely non-problematic, and it feels imperative to send them. "No, their listing application was rejected by the China Securities Regulatory Commission in August of that year. In 2012, the long-term titanium industry made a comeback, the company again submitted an application, and the listing site from the Shanghai Stock Exchange to the Shenzhen Stock Exchange. After more than a year in the queue, the application was abruptly withdrawn in March 2014 and the review was terminated. At that time, the IPO has opened the floodgates, why the long-term titanium industry chose to give up, is still a mystery, peer Shandong Dongjia is to give a statement. Zhao Wenrui, manager of Dongjia, Shandong Province, once told the China Times: "Now the titanium dioxide industry is so depressed, even if the IPO is successful, the issue price will not be much higher, it is better to give up." "It should be noted that until 2014, Dongjia, Shandong Province, had been the second-largest player in the titanium dioxide industry, and they had two failed IPOs, the second of which occurred in January 2014, two months before The Longyu Titanium industry withdrew its listing application. The outside world was deeply shocked by the marriage of the company to the long-time titanium industry. On May 6th, a reporter from the China Times informed a Sichuan dealer in the titanium industry of Longyu that he wondered, "How could this happen?" I have to get them to drink tea and ask about it. Matthew, a chemical analyst at China Merchants Securities, also said it was "very unexpected". Originally, the relationship between the two companies is more delicate, although not a enemy, but also not friendly. An industry insider, speaking on condition of anonymity, said the last boom cycle in the titanium dioxide industry occurred in 2011, when the price of titanium dioxide reached an all-time high in July of that year. Yulilian happened to be listed in the month, the issue price of 55 yuan / share, the first day of listing opening price of 95 yuan / share; After more than a month of pull-up, the stock price has reached a high of 133.30 yuan / share, once compared to Guizhou Maotai (600519 .SH). However, at this time, the long-range titanium industry fearless peer blame, suddenly a series of sharp price cuts and promotions, instantly collapsing the price of titanium dioxide, opening up the industry for up to 4 years of adjustment. The company was forced to follow the price cut and its share price peaked, falling as low as 14.91 yuan per share in four years, resulting in heavy losses for many shareholders. Who will become the owner of the Yulilian, Longyu titanium industry to abandon the past to choose cooperation, can be called "strong joint efforts." Data show that the current production capacity of the company is about 200,000 tons / year, and 60,000 tons / year of chlorinated titanium dioxide is being tested, the scale is comparable to the long-term titanium industry, only slightly inferior production. In 2012-2014, the production of titanium dioxide was 115.9 million tons, 12.7 million tons and 194.8 million tons, respectively, which has surpassed Shandong Dongjia and risen to the second highest in the industry. Investors are most concerned about, naturally, this suspension is intended to buy the dragon's titanium industry, or by the dragon's titanium industry shell? On May 6, "China Times" reporter as an investor called the company to inquire, the securities department staff revealed: "This matter only the senior level know, can say has been written in the announcement, there is really not much to reveal, or wait for the program to come out to see it." "The U.S. side can not give an answer for the time being, but its announcement revealed clues. "In an announcement issued on the evening of May 5th, the company said it was conducting due diligence on the proposed target company, Dragon's Titan, and that they were leading the way in this restructuring," Mr. Yang said. On April 21st, the company also disclosed another announcement of the suspension. In that announcement, the Company disclosed that it was also making adjustments to the 2015 Non-public Offering of A-Shares Plan issued on January 7, which related to the issue object, the number and amount of issues, and the purpose of raising funds. The combination of the two announcements has outlined the outlines for investors: through the issuance of shares, the company will invest in Longyu, Longyu Group, etc. to acquire a stake in Dragon's titanium industry, and turn it into a subsidiary of the company. But this integration also leaves an important mystery to be solved when the plan comes out. "China Times" reporter noted that in March 2010, Xu Gang, chairman of the company, and Tan Ruiqing, vice chairman, signed a "unanimous action agreement" with Du Xin, jointly becoming the actual controller of the listed company. In July 2014, the Agreement on Concerted Action expired and all three parties confirmed that they would not renew their contracts, so there is currently no actual controller of the Company. Yulilian also does not have a controlling shareholder, the largest number of holdings is Tan Ruiqing, followed by Xu Gang. In addition to directly holding shares in listed companies, Tan Ruiqing himself also indirectly holds shares through Yintai Investment and Yuxin sugar, both of which total 17.36%; Mr Xu's stake is 14.64 per cent. In 2014, the total revenue of the company was 2,051 million yuan; In the same year, the revenue of the titanium dioxide industry alone reached 3.257 billion yuan. As you can see, the assets of the titanium industry are larger than that of the company. If this time, through the issuance of shares to acquire the long-term titanium industry, Tan Ruiqing, Xu Gang's shareholding is likely to be long-term investment, long-term group beyond, which will lead to Li Jiaquan to become the actual controller of listed companies. How should Tan Ruiqing and Xu Gang consolidate their position? The only way is to participate in the fund-raising of the company, so that the number of holdings continue to rise.