Chapter 231 [Wang Qingxiong is completely finished this time (5/10)]
Chapter 231 [Wang Qingxiong is completely finished this time (510)]
When Fang Hong came to Qunxing Capital, there was another rumor about Hengtong Pharmaceutical.
That is to say: If Hengtong Pharmaceutical cannot complete the IPO this year and resorts to the next best way to seek mergers and acquisitions, it will become unpredictable for Hengtong to be acquired by a third party and exit. In order to ensure a smooth exit, Zhongtai Capital has set up a safety clause: 10,000
Once it cannot be listed, the company must repurchase the equity in the hands of Zhongtai Capital at five times the return on investment to ensure the smooth exit of the investor.
As soon as this rumor came out, it caused thousands of waves.
Since the end of 2007, Hengtong Pharmaceutical Group has begun to rush for the A-share market and has been struggling to do so. Because of the stringent constraints of a series of agreement terms, Wang Qingxiong had to accelerate the IPO process of Hengtong Pharmaceutical Group.
At the beginning of 2008, Hengtong Pharmaceutical Group officially submitted a listing application to the A-share main board. However, considering the number of companies queuing up for A-share listings and the review process, time is already very tight to be listed before 2009.
What is unexpected is that last year, a financial tsunami swept the world. After the listing application of Hengtong Pharmaceutical was submitted, its application materials were actually in a state of being "in limbo".
After a year of hard work, there was no way for the A-shares to be listed.
After being rejected by Big A, because he signed a gambling agreement with Zhongtai Capital, Zhongtai asked Wang Qingxiong to repurchase the equity at a high price according to the agreement.
For Wang Qingxiong, he felt that he had also suffered a big loss. Under such circumstances, both parties were dissatisfied, and the conflicts had already existed half a year ago and continued to accumulate.
However, Wang Qingxiong still held back and negotiated with Chung Tai Capital, hoping for another half-year extension.
After successfully obtaining an additional half-year time limit, Wang Qingxiong retreated to the next best option and began to focus on H shares. If A shares could not be listed, he sought to go south and go listed in Hong Kong.
However, the house leaked and it rained all night.
After struggling for half a year this year, the switch to H-shares can basically be declared a failure.
It is absolutely impossible for Chung Tai Capital to give Wang Qingxiong any more grace time now. It previously gave him half a year because it could not find a third party to take over.
But things are different now. Qunxing Capital jumped out and said that it was willing to take over and that it had the strength to take over. Of course, Zhongtai Capital chose to withdraw with capital and profits without hesitation.
As for what will happen to Hengtong Pharmaceutical and Wang Qingxiong, Chung Tai Capital doesn’t care at all.
Hua Yu stood up and took a piece of material from his desk and handed it to Fang Hongdao: "This time I met with Liu Qizheng, the head of Zhongtai Capital, and obtained more specific terms and details of the series of agreements from him. Hengtong Pharmaceutical went public.
Failure will directly lead to a series of clauses in its investment agreement being triggered in a domino-like chain, including the liquidation preference clause, share repurchase clause, and lead-sale right clause signed to Zhongtai Capital.”
As private equity financing, entrepreneurs and investors naturally have to sign a series of investment agreement term lists, ranging from a dozen to dozens of terms. In the game between entrepreneurs and investors, if the investors take the lead
Investors will form various restrictions on entrepreneurial development in an all-round way to protect their own investment interests.
To put it bluntly, investors’ money is not as easy to get as they want. The cost of getting it is also high, and the potential risks are also high.
If you are really dug into a trap by investors and set up a trap without realizing it, how you handle entrepreneurs in the future depends entirely on the mood of the investors.
Hua Yu said with great certainty: "Wang Qingxiong is completely finished this time."
Fang Hong browsed through the liquidation preference clauses, share repurchase clauses and lead sale rights clauses signed by Hengtong Pharmaceutical Group and Zhongtai Capital written in this material report.
After a while, Fang Hong couldn't help but look at it with admiration and said: "Zhongtai Capital is also playing tricks, especially these three major clauses are interlocking. Once triggered, it will be a series of triggers. Wang Qingxiong is indeed finished. The fish on the chopping board is ironclad."
[Liquidation preference clause]
If Hengtong Pharmaceutical triggers a liquidation event, the Series A preferred shareholders, that is, the investors (Zhongtai Capital), have the priority to obtain a return of 5 times the initial purchase price per share with the common shareholders, that is, the entrepreneurial shareholders (Wang Qingxiong).
The liquidation here is not the commonly understood bankruptcy liquidation due to insolvency and the inability to continue operating, but a further step if the company is merged, acquired, sold controlling shares, and sold major assets, resulting in the company's existing shareholders occupying
If the equity ratio of the surviving company is less than 50%, it will also be subject to liquidation.
The terms of this agreement are down-to-earth. For example, if Hengtong wants to sell its equity, the equity held by Zhongtai Capital will be sold first, and Wang Qingxiong will queue up behind him.
[Share repurchase terms]
If the majority of shareholders of Class A preference shares (Zhongtai Capital) agree, Hengtong Pharmaceutical should repurchase the outstanding Class A preference shares in three years starting from the fifth year. The repurchase price is equal to the original issuance price plus the announced but
Unpaid dividends.
Of course, the triggering method for share repurchase may not be a vote by preferred shareholders (Zhongtai Capital), but may be triggered by a specific temporal event stipulated in the terms. For example, if the company fails to achieve an IPO within five years, it will be triggered.
Share repurchase terms.
Now that the five-year period has not only passed, but has also been extended for half a year, Hengtong Pharmaceutical has undoubtedly triggered this clause due to time-related events.
[Terms of right to sell]
Before Hengtong Pharmaceutical is eligible for IPO, if the majority of Class A preference shareholders (Zhongtai Capital) agree to sell or liquidate the company, the remaining Class A preference shareholders and common shareholders should agree to the transaction and sell them at the same price and conditions.
of shares.
Now that all three major clauses have been triggered, Wang Qingxiong is already a piece of cake.
The liquidation preference clause means that Bell Capital can sell first, which is the first link; the share repurchase clause ensures that if Hengtong Pharmaceutical fails to go public, Bell Capital can also exit with profits, which is the second link; the right to sell shares clause
It means that Zhongtai Capital can sell its equity in Hengtong Pharmaceutical to whomever it wants, and Wang Qingxiong must agree to the transaction.
Now that Zhongtai Capital is selling to Qunxing Capital, Wang Qingxiong has no choice. And the most important thing is the word "lead sale", which means that whoever Zhongtai Capital wants to sell to, Wang Qingxiong can still follow Zhongtai Capital at the same price and conditions.
Sell the shares in his hands together, because the difference requires Wang Qingxiong to sell his own shares to compensate Zhongtai Capital. This is the last step.
Under the interlocking nature of this series of clauses, Wang Qingxiong was completely out of control. From the moment the listing failed, he was no longer able to decide the future of Hengtong Pharmaceutical, which was completely controlled by Zhongtai Capital.
Fang Hong put the materials aside and said immediately: "Pack up a debt as soon as possible and put it in the income statement of the shell company Ruixi, and also get some non-performing asset packages from your Huayang Group."
Hua Yu nodded and asked bluntly: "How much?"
Fang Hong pondered for a moment and said concisely: "Let's pack a 20 billion package and go in."
Hua Yu nodded again: "I understand."
Packing up a 20 billion yuan debt or non-performing asset package and putting it into Ruihe is naturally the third step of the strategy to annex Hengtong Pharmaceutical Group, and the third step of the strategy formulated by Fang Hong is to completely clean out Wang Qingxiong, which is also the entire bureau.
The most ruthless step inside.
After completing the second step of the "vacate the cage and change the bird" strategy, Hengtong Pharmaceutical's valuable items were packed up and moved to the name of the shell company Ruihe. At this time, Qunxing Capital accounted for 88% of the shares of Ruihe, and Wang Qingxiong was still among them.
It holds 9% of the shares, and the remaining 3% are other small shareholders.
Wang Qingxiong is a minority shareholder compared to Qunxing Capital at this time, but he still holds 9% of the equity and is still the company's second largest shareholder, and he still has a lot of say.
After annexing Hengtong Pharmaceutical, Fang Hong will carry out a large-scale reorganization of Ruihe. The biggest obstacle at this time will inevitably be the second largest shareholder Wang Qingxiong. At this time, the first thing Fang Hong wants to do is not reorganization, but first
Kick Wang Qingxiong out completely, otherwise he will always come out to play devil's advocate, and even if he can't have a practical impact on your plans, he will still disgust you from time to time.
Fang Hong also firmly believed that Wang Qingxiong would definitely do this. After all, from his perspective, if the company he founded and founded was swallowed up by the stars, how could he be willing to accept it? How could he not feel resentful in his heart?
For example, Wang Qingxiong relied on his status as the second largest shareholder to demand an audit of the accounts, instigated several small shareholders to hold a shareholders' meeting, proposed dissolving the company, etc. When he did this, you had to play with him and accompany him through the process.
Although it will definitely not pass in the end, it is disgusting.
Therefore, he must be eliminated completely. The game in the capital market is not so black and white.
As a rational person, Fang Hong's choice was destined to complete this matter thoroughly and clean it up, so as not to leave any potential risks for himself.
Fang Hong would not have any psychological burden if he did something so ruthless. This is the reality of the capital market. Moreover, Wang Qingxiong himself is not a good bird, and he does not deserve sympathy for ending up like this, so there will be no psychological burden.
