Ms. Dong is very optimistic about the future of new energy vehicles. The positive force has promoted the acquisition of this new energy vehicle. However, has Gree Electric acquired Zhuhai Yinlong New Energy Co., Ltd. (hereinafter referred to as “Zhuhai Yinlongâ€)? This has caused great controversy among the people in the industry. In fact, even the Shenzhen Stock Exchange seems to "do not understand" and send out an inquiry letter.
Among the many market participants, some people in the legal profession believe that the M&A plan is approved, but the matching financing method needs to be adjusted; and most analysts and investment banks say that because of the cross-section of each proposal, some of them are not operational. In fact, the M&A plan is equivalent to being rejected.
On the afternoon of October 31, a person close to Gree’s top executives said that the acquisition of Zhuhai Yinlong was only a matching financing. The company will adjust the plan, but the specific direction has not yet been determined. The person believes that there are many supporting financing options, including cash payment acquisitions.
In the legal text, is the merger and acquisition calculated?On October 31, Shenzhen Stock Exchange issued a letter of concern to Gree Electric Appliances, requesting a clear explanation of whether the proposal for the issuance of shares to purchase assets was deemed to have been passed as a whole. If yes, please further explain whether it complies with the CSRC's Measures for the Administration of Major Asset Restructuring of Listed Companies. The relevant provisions of Articles 13 and 24. Explain the follow-up arrangements for this transaction, including but not limited to whether the company continues to promote the transaction plan, whether it intends to make adjustments to the plan, whether the relevant adjustment constitutes a major adjustment, whether the company intends to re-execute the review process, etc., and clearly states the follow-up arrangements Whether it meets the requirements of the Regulations on Restructuring Management.
The resolutions rejected at the Gree Electric Appliances General Meeting included 15 items, including: Proposal 1 "Proposal on the Company's Issuance of Shares to Purchase Assets and Raising Supporting Funds and Related Transactions in Accordance with Laws and Regulations", Proposal IV Proposal for Raising Supporting Funds and other key proposals; however, Proposal 2, “Proposal on the Company's Issuance of Shares to Specific Targets to Purchase Assets†and Proposal 3 “Proposal on the Company's Issuance of Shares to Specific Targets to Purchase Assets (Revised)†Obtained. Since the motions one and four were rejected, is the second and third motions passed? This is exactly the controversy that the parties are most concerned about. Even the Shenzhen Stock Exchange seems to be "incomprehensible."
Xue Jing, a lawyer at Wino Law Firm, said that although the resolution of the framework proposal and the resolution to raise matching funds were rejected, the resolution to issue shares to acquire Zhuhai Yinlong's shares is not necessarily invalid. The reasons are as follows: As a framework resolution, shareholders can vote against any of the contents of any of them. The first resolution was rejected because it contained the contents of the matching funds raised by the shareholders. The 15 resolutions rejected were related to the fund raising. None of the separate resolutions regarding the issuance of shares was rejected. Although it can be considered from the perspective of the independence of each agreement, the whole project may be a master plan. Gree is now facing problems. If it wants to continue the acquisition, it will face a modified acquisition plan.
Wang Jiayi, a lawyer of Guanghe Law Firm, believes that the shareholder meeting approved the acquisition plan, but disagreed with the additional financing method of the issuance. The main reason is that the small and medium shareholders think that the additional issuance will dilute the shareholders' equity, and the additional price is also controversial.
The content of the motion is lacking in operabilityThere are also many people in the industry who have different opinions, because the content of the motion is cross-cutting, and whether some of them have actually led to the total failure; if it is changed to other acquisition methods, such as possible cash acquisitions, then the various legal procedures must be re-executed, including the re-pass of the shareholders’ meeting. M&A plan.
Changchun Securities analyst Xu Chun said that there are indeed two different interpretations from the announcement: the first is the asset acquisition proposal but the supporting financing scheme is rejected, and the second is that the asset acquisition and supporting financing schemes are rejected. As many of the proposals submitted by Gree for review are cross-cutting proposals, any veto may have a material impact on other proposals. Although the second proposal and its detailed rules concerning the acquisition of assets were passed, the multiple cross-cutting proposals including Proposal I, Proposal No. 7 and Proposal Eight were not passed, which means that all the proposals required for the acquisition of Zhuhai Yinlong are not all It was passed, which made it possible to disagree on the interpretation of the motion; but from the current situation, it should be that the asset acquisition and supporting financing schemes were rejected.
Chen Ziyi, an analyst at Haitong Securities, said that because the proposals for the first preconditions such as Proposal 1 and Proposal No. 7 were rejected, this actually meant that the overall plan was rejected. The follow-up management needs to re-revise the proposal and reconvene the board of directors. The shareholders' meeting re-executed the legal process.
As for Gree Electric related persons, they may consider buying cash in Zhuhai Yinlong. Some investment bankers also explained that if the final merger is changed to cash acquisition, it is estimated that the shareholders meeting will be re-acquired. Once the acquisition consumes a large amount of cash, this may be Gree's future dividend policy will have an impact, and whether the small and medium-sized shareholders will finally be satisfied, and there are also uncertainties in the future.
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