Text | Radar Finance Wu Yanrui
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Zotye automobile reorganization adds another change.
Recently, Zotye Automobile Co., Ltd. (hereinafter referred to as "Zotye Automobile" or *ST Zotye) announced the public recruitment and reorganization of investors. The incident was caused by the fact that two previously recruited companies successively suspended or terminated their investment in Zotye Automobile.
In addition to the listed company Zhongtai Automobile itself, Tieniu Group, the controlling shareholder of the company, has been declared bankrupt, and some subsidiaries and Sun Company of the company have successively entered the bankruptcy liquidation.
By the end of 2020, Zotye’s net assets were-4.423 billion yuan, and its vehicle business was basically in a state of suspension. In addition to the failure of reorganization, the company will also have the risk of terminating its listing.
However, in the secondary market, the company’s stock has been fried.
Zotye Auto Recruits Reorganized Investors
On the evening of July 1, *ST Zotye issued the Announcement of Company Managers on Public Recruitment and Reorganization of Investors.
According to the announcement, the purpose of this recruitment and reorganization is to coordinate and promote the reorganization of Zotye Automobile and its core business subsidiaries.
The basic conditions for the recruitment and reorganization of investors mainly include that they have not been included in the list of dishonesty by the people’s court or taken measures to restrict high consumption, and they can issue credit certificates or other performance certificates of not less than 1 billion yuan. There are two conditions for commitment: 1. Participate in the reorganization with a reorganization consideration of not less than 2 billion yuan, and specify the reorganization consideration in the intention registration form; 2. After obtaining the qualification of reorganization investor and becoming the controlling shareholder, continue to inject funds and resources to lead Zotye Automobile to develop and grow in the field of vehicle manufacturing.
This is the second time that Zotye Auto has publicly recruited investors. The companies recruited for the first time have terminated their investment one after another, and Zotye Auto can only openly recruit again.
On September 21, 2020, Zotye Automobile received a notice from the People’s Court of Yongkang City, Zhejiang Province, and accepted the registration of the company’s application for pre-reorganization. On September 23, 2020, Zotye Automobile and its pre-reorganization manager announced the public recruitment of investors. On December 25th and 28th, 2020, one intended investor signed a Confidentiality Agreement with the pre-reorganization manager, and the other intended investor signed a Confidentiality Agreement and an Intention Agreement.
On May 12, 2021, Shanghai Zhiyang Investment Co., Ltd. (hereinafter referred to as "Shanghai Zhiyang"), which signed the Agreement of Intention with Zotye Automobile, sent a letter saying that it decided to postpone the investment. According to the letter, based on Shanghai Zhiyang’s evaluation of the due diligence results of Zotye Automobile, and the recent stock price change of Zotye Automobile, which seriously deviated from its fundamentals, it was decided to postpone the investment in Zotye Automobile due to prudent investment considerations.
On June 22, 2021, Hunan Zhibo Equity Investment Fund Management Co., Ltd. (hereinafter referred to as "Zhibo Investment") issued a letter on terminating the Confidentiality Agreement. The specific content of the letter is that since Zhibo Investment and its fund products to be issued and managed by the company are planning to implement major equity investment actions of unlisted companies related to the automobile industry, in order to avoid misunderstanding by investors and unnecessary interference to the securities market, Zhibo Investment decided to terminate the Confidentiality Agreement according to the relevant agreements of both parties.
On the day when Zhibo Investment sent a letter, Zhejiang Jingheng Law Firm (hereinafter referred to as "Zhejiang Jingheng") issued a "Reply" asking whether to terminate this investment. On the 24th, Zhibo Investment replied to the above Reply, saying that this investment under the Confidentiality Agreement between the two parties had been terminated.
The controlling shareholder of the company and its subsidiaries also applied for reorganization.
On September 1, 2020, Zotye Automobile received a letter of notification from Tieniu Group Co., Ltd. (hereinafter referred to as "Tieniu Group"), the controlling shareholder of the company. Tieniu Group received the Civil Ruling issued by Yongkang People’s Court of Zhejiang Province, and the court accepted the reorganization application of Tieniu Group.
On December 23, 2020, Zotye Automobile announced that the parent company Tieniu Group had been seriously insolvent and had no ability to continue to operate. It had been ruled by the court to terminate the reorganization procedure and was declared bankrupt.
According to the announcement, Zotye Automobile and Tieniu Group remain independent in terms of assets, business and finance. At present, the company’s main business is in a state of suspension, which will not have a major impact on the company’s daily operations. The subsequent disposal of Tieniu Group’s bankruptcy may cause changes in the actual control right of Zotye Automobile.
In addition to the controlling shareholder, some wholly-owned subsidiaries of Zotye Automobile have been ruled by the court to accept bankruptcy liquidation.
On October 24, 2020, Zotye Automobile announced that Hunan Jiangnan Automobile Manufacturing Co., Ltd. (hereinafter referred to as "Jiangnan Manufacturing"), a wholly-owned third-tier subsidiary of the company, applied to the court for reorganization on the grounds that it could not pay off its debts due and obviously lacked solvency. The court has ruled to accept the reorganization application of the applicant Jiangnan Manufacturing.
On December 3, 2020, Zotye Automobile issued the Announcement on the Acceptance of Bankruptcy and Liquidation by the Court of a wholly-owned secondary subsidiary. Zotye New Energy Automobile Co., Ltd., a wholly-owned secondary subsidiary of Zotye Automobile, was filed for bankruptcy liquidation by creditors on the grounds that it could not pay off the due creditor’s rights and the assets were insufficient to pay off all the debts. The relevant court has ruled to file a case to accept the bankruptcy liquidation application.
At the same time, it was mentioned in other tips of the announcement that Hangzhou Jieneng Power Co., Ltd., Hangzhou Yiwei Automobile Industry Co., Ltd. and Zhejiang Zhongtai Automobile Sales Co., Ltd., wholly-owned third-tier subsidiaries of Zotye Automobile, were all ruled bankrupt and liquidated by Yongkang Court.
On December 9, 2020, another wholly-owned secondary subsidiary of Zotye Automobile was ruled by the court to accept the reorganization. The applicant Jinfeng Technology (Shenzhen) Co., Ltd. applied to Yongkang Court for bankruptcy liquidation of Zotye Automobile Manufacturing Co., Ltd. on the grounds that Zhejiang Zotye Automobile Manufacturing Co., Ltd. could not pay off its due debts and its assets were insufficient to pay off all its debts.
On May 18th, 2021, Zotye Automobile was informed that Yongkang Court ruled to accept the reorganization of Zhejiang Tieniu Automobile Body Co., Ltd., a wholly-owned subsidiary of the company.
On June 29th, 2021, Yongkang Court issued a Civil Ruling, and the applicant Shenzhen Bike Power Battery Co., Ltd. applied for bankruptcy liquidation of Yongkang Zotye Automobile Co., Ltd. (hereinafter referred to as "Yongkang Zotye") on the grounds that it could not pay off its debts due, its assets were insufficient to pay off all its debts or it obviously lacked solvency. Among them, Yongkang Zotye is a wholly-owned subsidiary of Zotye Automobile.
The company has basically stopped production, but the stock price has been speculated.
In the letter of concern reply announcement issued by Zotye Automobile on July 2, it answered the company’s delisting risk, the uncertainty of going concern ability, the freezing of major bank accounts, the uncertain solution of capital occupation, the failure of reorganization, the unfinished performance compensation, and the declaration of bankruptcy liquidation of the controlling shareholder.
Zotye Automobile lost 10.801 billion yuan in 2020, and its net assets at the end of 2020 were-4.423 billion yuan. According to the regulations, the company’s net assets after annual audit are negative, and it will continue to implement the "delisting risk warning" and face the risk of termination of listing.
For the ability to continue to operate, the company’s main vehicle business is basically in a state of suspension. Jiangnan manufacturing, which went bankrupt and reorganized on October 24, 2020, is a manufacturing enterprise with automobile as its core business. Jiangnan Manufacturing has laid out vehicle production bases in Zhejiang, Hunan, Hubei, Shandong, Chongqing, Guangxi and other places, and has the production qualification of fuel vehicles and new energy vehicles.
It is worth noting that the above-mentioned production qualifications of fuel vehicles and new energy vehicles should be one of the few valuable assets of Zotye Automobile. As early as June 2017, the state has suspended the approval of new energy production qualifications. In order to obtain this qualification, LI spent 650 million yuan to acquire 100% equity of chongqing lifan Automobile Co., Ltd.
It is worth noting that despite the company’s troubles, the stock price did not fall but rose, with multiple daily limit.
In the announcement of Zotye Automobile’s reply to the letter of concern issued on July 2, it was mentioned that the company still has the risk that the stock price deviates from the fundamentals.
Zotye Auto’s share price from January 12, 2021 to July 1, 2021, the cumulative increase of the company’s share price was 493.86%, and the increase of Shenzhen A Index was 2.78% during the same period, which was a big deviation. Zotye Auto’s recent suspension of vehicle business has not changed. In the short term, the company’s share price has risen a lot, which is quite different from the Shenzhen Stock Exchange A index in the same period, and there is a risk that the company’s share price deviates from the fundamentals.
According to the statistics of daily market data provided by the straight flush, from January 4, 2021 to July 5, 2021, among the 121 trading days, Zotye Automobile increased by 63 of the daily limit of about 5%, accounting for 52.07%. There are 11 daily limit days in January, 10 days in February, 9 days in March, 9 days in April, 10 days in May, 13 days in June, and finally one day in July 2.
Where will Zotye Automobile go? Will there be a new force to build a car to acquire the production qualification of Zotye Automobile? Radar finance will continue to pay attention.
Radar finance (id: leidacj)