Juhua Co., Ltd. issued an announcement on the evening of September 18 that the company is planning to acquire 20% of the equity of Zhejiang Petrochemical held by Juhua Investment through the issuance of shares and payment of cash, and at the same time, it will raise additional supporting funds. The company stated that the transaction is expected to constitute a major asset reorganization but will not result in a change of actual controller.
Zhejiang Petrochemical Company was established on June 18, 2015. It is a mixture of private enterprise holding and state-owned enterprise equity participation. ownership enterprise. The registered capital is 50.8 billion yuan. The four shareholders are Rongsheng Petrochemical, Juhua Investment, Tongkun Investment and Zhoushan Haizong, with shareholding ratios of 51%, 20%, 20% and 9% respectively. Among them, Juhua Investment is a wholly-owned subsidiary of Juhua Group, the controlling shareholder of Juhua Co., Ltd.
Rongsheng Petrochemical, the largest shareholder of Zhejiang Petrochemical, currently holds 51% of the shares. If the acquisition of Juhua shares is successfully implemented, it will become the only Second to Rongsheng Petrochemical, it is the second largest shareholder alongside Tongkun Investment, which is a subsidiary of Tongkun Investment.
Rongsheng Petrochemical’s 2020 semi-annual report shows that Zhejiang Petrochemical is the implementation entity of its 40 million tons/year refining and chemical integration project. As of the end of June 2020, total assets were 151.091 billion yuan, with net assets of 44.903 billion yuan; in the first half of 2020, Zhejiang Petrochemical achieved operating income of 27.541 billion yuan and net profit of 4.488 billion yuan.
Zhejiang Petrochemical’s 40 million tons/year refining and chemical integration project has a planned total area of 41 square kilometers, a total investment of 173 billion yuan, and produces national VI gasoline, diesel, aviation fuel, and paraxylene (PX), high-end polyolefins, polycarbonate and other more than 20 petrochemical products. The project was planned at one time and implemented in two phases: the first phase has an annual processing capacity of 20 million tons of crude oil and an annual output of 5.2 million tons of aromatics and 1.4 million tons of ethylene. It was completed and put into operation at the end of December 2019; the second phase has an annual processing capacity of 20 million tons of crude oil and an annual output of 5.2 million tons of aromatics and 1.4 million tons of ethylene. It produces 6.6 million tons of aromatics and 2.8 million tons of ethylene.
Benefiting from the 40 million tons/year refining and chemical integration project, Rongsheng Petrochemical achieved revenue of 50.282 billion yuan in the first half of 2020, a year-on-year increase of 27.32%; it achieved net profit attributable to the parent company 3.208 billion yuan, a year-on-year increase of 206.55%.
Due to the surge in performance, Rongsheng Petrochemical’s stock price has increased by more than 50% since the second half of the year, and its latest market value has reached 119.2 billion yuan.
Juhua Co., Ltd. has a complete fluorine chemical industry chain, among which fluorine refrigerants are the global leader, and its leading products have great influence in Zhejiang and surrounding areas. Compared with Rongsheng Petrochemical, Juhua’s latest market value is only 18.4 billion yuan, and its revenue and net profit attributable to the parent company in the first half of 2020 were 6.943 billion yuan and 16 million yuan respectively. With the acquisition of 20% equity of Zhejiang Petrochemical, Juhua Co., Ltd.’s performance is expected to be significantly improved.
Juhua Co., Ltd. stated that the parties will further communicate and negotiate on specific plans such as transaction price, share issuance price, share issuance quantity, performance commitments and compensation plans involved in the transaction, and A separate formal agreement will be signed to stipulate the specific plan of the transaction. At present, the parties to the transaction have not signed a formal transaction agreement, and the specific transaction plan is still under discussion and verification, and there is still uncertainty. </p
