State Energy Group frequently transfers reorganizations of coal enterprises

Reporters learned from the Beijing Property Exchange that on August 2, 55% of the shares and 799 million yuan of creditor's rights of Guodian Yongshou Coal Co., Ltd. (referred to as "Guodian Yongshou Coal Industry") began to be transferred, with a base transfer price of 640 million yuan, of which 55% of the shares listed at only 1 yuan. At the end of last year, the project had been transferred once. At that time, the transfer price was 799 million yuan, which was equivalent to 75% discount. Not only that, since this year, the State Energy Group has transferred coal companies many times, behind which is the gradual deepening of supply-side reform of the coal industry, industry mergers and reorganizations began to accelerate.

Guodian Yongshou Coal Industry is a company under the State Energy Investment Group Co., Ltd. (hereinafter referred to as "National Energy Group"), whose controlling shareholder is Guodian Shaanxi Electric Power Company, while the latter is a wholly-owned subsidiary of Guodian Energy Group and an important company in Shanxi Province. The State Energy Group is formed by the merger and reorganization of China Electric Power Group Corporation and Shenhua Group Co., Ltd.

The listing and transfer of the target of Yongshou Coal Industry of China is composed of two parts: creditor's rights and equity rights. Among them, Yongshou Coal Industry of Guodian has borrowed about 795 million yuan from Shaanxi Electric Power Company of Guodian, and the interest payable is about 40164 million yuan. The total principal and interest is 799 million yuan, which is higher than the listed price of 640 million yuan. And Guodian Yongshou Coal Industry 55% of the equity, listing price is only 1 yuan.

Yongshou Coal Industry of China is located in Yongshou County, Xianyang City, Shaanxi Province. It was founded in 2008 with registered capital of 40 million yuan, and its main business is coal mining and washing industry. According to the listing information of Beijing Property Rights Exchange, from the beginning of 2017 to May 31 this year, the business income of Yongshou Coal Industry was 0 yuan, and its net profit was reduced from - 253 million yuan to - 276 yuan. According to the company's financial information, as of May 31, 2019, its total assets were 607 million yuan, while its liabilities increased from 816 million yuan to 887 million yuan. Guodian Yongshou Coal Industry has been insolvent. Shaanxi Electric Power Company holds 55% and Shaanxi Zhengdao Investment Company holds 45%. The original shareholders do not give up the exercise of priority assignment. It is worth mentioning that Yongshou Coal Industry still has a lot of information to know. The mining right of the company's Ronzigou Coal Mine is related to Cuiping Mountain Nature Reserve (city level) in Yongshou County. The coal mine has completely stopped construction and exploration activities. At the same time, some mining areas of Nianzigou Coal Mine have the risk of involving the protection area of drinking water source of Taiyu River in Binxian County. However, up to now, the target enterprise has not received the relevant notification documents for the establishment of the water source. The company reminds the intended transferee that it should understand the relevant planning of the Taiyu River Drinking Water Source Reserve in Binxian County on its own, and the relevant liability risks arising therefrom shall be borne by the transferee itself. The sources of the above information are "Guidance Opinion on Orderly Withdrawal of Mining Rights in Protected Areas in Shaanxi Province" (No. 39 of Shaanxi Political Office [2018]), and relevant notifications from the competent government departments, etc.

In addition, the mining right of Nianzigou Coal Mine should pay a resource price of 140 million yuan in nine phases. The company has paid about 100 million yuan for mining rights, and the remaining 40 million yuan has not been paid. The validity period of mining right certificate of Nianzigou Coal Mine is up to September 18, 2017, and it has expired at present. This project involves the resettlement of employees. The Employee Resettlement Scheme of Guodian Yongshou Coal Industry Co., Ltd. has been placed on the exchange for reference. On May 15, 2019, Guodian Yongshou Coal Industry received a summons from the Intermediate People's Court of Yinchuan City, Ningxia Hui Autonomous Region, concerning the dispute over the right of recourse for bills. The target enterprise Guodian Yongshou Coal Industry Co., Ltd. was sued by Zhongding International Engineering Co., Ltd. for the dispute over the right of recourse for bills and went to the Intermediate People's Court of Yinchuan The court will be held at 15:00 on 29 July 2019.

China Securities Journal reporters combed and found that in recent years, the State Energy Group has frequently transferred the shares of coal companies.

On May 29 this year, 35% of the equity and creditor's rights of Guodian Xianyang Coal Co., Ltd. were listed and transferred on the Beijie Stock Exchange. The transferor is Guodian Yongshou Coal Industry, which is the only company invested by Guodian Yongshou Coal Industry. The bottom price of the transfer was 33.35 million yuan, down 47% from the listed price of 49.134 million yuan last year. It should be noted that from 2017 to October 31, 2018, the operating income and net profit of Guodian Xianyang Coal Co., Ltd. are also 0 yuan.

On February 25, this year, 35% of the shares of Xixia Guohua Huarong Coal Material Co., Ltd. were listed and transferred at a base price of 1.784 million yuan. The transferor is Guodian Xixia Power Generation Co., Ltd., which belongs to the National Energy Group. On June 10 and July 18 this year, the State Energy Group listed and transferred 75% and 15% of the shares of Beijing Jihua Xingye Coal Co., Ltd. at a total listing price of nearly 30 million yuan. Behind the action of

National Energy Group, the reform of coal industry supply side has entered the acceleration stage of merger and reorganization.

In January 2018, 12 ministries and commissions jointly issued "Opinions on Further Promoting the Transformation and Upgrading of Mergers and Acquisitions of Coal Enterprises", emphasizing that the average scale of coal enterprises will be significantly expanded through mergers and reorganizations, and the integration degree of upstream and downstream industries will be significantly improved. By the end of 2020, they will strive to form a number of strong international competitions nationwide. Efforts will be made to develop and nurture a number of modern coal enterprise groups with 100 million tons of super-large coal enterprises. Promote the reorganization of other coal-related central enterprises by the central specialized coal enterprises, so as to make the specialized coal enterprises stronger, better and bigger.

In early August 2018, SASASAC again convened a meeting of heads of central enterprises and local SASAC, pointing out that the strategic restructuring of central enterprises in coal and other fields should be steadily promoted in the second half of the year to promote the progress of state-owned capital.