Qi Zhenggang officially won Jiaozuo Wanfang, and Sanmenxia Aluminum restarted capital operations with 15 billion yuan.

Photo source: Visual China

Blue Whale News, March 3 (Reporter Xu Xiaochun)On the evening of March 3, Jiaozuo Wanfang announced that the by-election of non-independent director Cao Liping had been approved by the board of directors. After Cao Liping was subsequently reviewed and successfully elected by the shareholders ‘meeting, more than half of the directors of Jiaozuo Wanfang’s board of directors were nominated by Zhejiang Ansheng and Ningbo Zhongman. Zhejiang Ansheng and Ningbo Zhongman were Zheng Gang who actually controlled the company and held a total of Jiaozuo Wanfang. 19.31% equity. This also means that Qi Zhenggang, a well-known entrepreneur and chairman of Jinjiang Group, will soon officially become the actual controller of Jiaozuo Wanfang after eight years of fighting for control.

Almost at the same time, Jiaozuo Wanfang announced that it would start the acquisition of Sanmenxia Aluminum, another well-known company controlled by Qi Zhenggang.

Qi Zhenggang’s Jinjiang Group became the largest shareholder of Jiaozuo Wanfang around 2016. At that time, the market believed that Qi Zhenggang would load Sanmenxia Aluminum into Jiaozuo Wanfang to achieve asset listing. However, since then, Jiaozuo Wanfang began to fight for control. The dispute continued until 2021, when Qi Zhenggang was temporarily defeated, and another company and Tai ‘an became the largest shareholder.

However, Qi Zhenggang’s planning for the listing of Sanmenxia Aluminum has not stopped. In October 2021, Qi Zhenggang found another operating target, Fuda Alloy. However, at the end of 2023, Sanmenxia Aluminum ‘s plan to borrow Fuda alloy from a shell fell through again. At the same time, He Tai ‘an Cheng was in trouble, and Qi Zhenggang once again turned the anchor head back to Jiaozuo Wanfang.

Starting from March 2024, Qi Zhenggang’s Jinjiang Group has continued to increase its holdings in Jiaozuo Wanfang, and after the Hetaian Origin Court enforced a passive reduction, the shareholding ratio was overtaken. This time, Jiaozuo Wanfang’s by-election for the board of directors and the acquisition of Sanmenxia Aluminum are moving together, showing that Zheng Zhenggang has cleared the obstacles.

Acquisition of Sanmenxia Aluminum

Due to plans to disclose major matters, Jiaozuo Wanfang suspended trading since the market opened on March 3. At noon, Jiaozuo Wanfang officially announced that it would plan to issue shares to purchase 100% equity of Cayman Aluminum (Sanmenxia) Co., Ltd.(hereinafter referred to as Sanmenxia Aluminum), an asset of Jinjiang Group, and raise matching funds.

Data show that Sanmenxia Aluminum was established in 2003. It is a leading alumina producer in China. Its main business is the production and sales of alumina, aluminum hydroxide, caustic soda, liquid chlorine, metallic gallium and other products. It is one of the three major domestic alumina spot suppliers. The alumina available for trading ranks at the forefront of the domestic market and holds shareholding rights in multiple electrolytic aluminum companies.

So far, Jiaozuo Wanfang has signed an intentional agreement with the main counterparty Hangzhou Jinjiang Group Co., Ltd.(hereinafter referred to as Jinjiang Group), and has initially reached an intention to purchase assets. The final price will be determined through negotiation after the evaluation of relevant assets is completed.

According to Tianyan App, behind Jinjiang Group is the Yan Zhenggang family. Yan Zhenggang’s wife Wei Xuefeng and daughter Dou Baibing hold 90% and 10% of Yande Industrial respectively. Wei Xuefeng alone holds 100% of Hengjia Holdings. Shares, Yan Zhenggang, Hengjia Holdings and Yande Industrial jointly hold 100% equity in Jinjiang Group.

Jinjiang Group and its subsidiary Zhengcai Holdings hold 28.55% and 23.22% of Sanmenxia Aluminum respectively. In addition, Hengjia Holdings and Yande Industrial hold 7.95% and 6.6% of the shares respectively. Qi Zhenggang’s family of three jointly controlled 66.32% of Sanmenxia Aluminum.

It is worth mentioning that Yan Zhenggang has long planned to list Sanmenxia Aluminum’s assets. Around 2016, when Jinjiang Group first became the largest shareholder of Jiaozuo Wanfang through a subsidiary, it sent the general manager of Sanmenxia Aluminum to serve as a director of Jiaozuo Wanfang.

After being at a disadvantage in the battle for control of Jiaozuo Wanfang in 2021, Qi Zhenggang turned around and planned to operate Sanmenxia Aluminum to launch Fuda Alloy on a backdoor basis.

In October 2021, Fuda Alloy announced that it would set out all assets and liabilities of the listed company and replace them with the equivalent amount of Sanmenxia Aluminum held by Jinjiang Group. At the same time, Fuda Alloy plans to purchase 100% equity of Sanmenxia Aluminum from Jinjiang Group, Zhengcai Holdings, Hengjia Holdings, Yande Industrial, Hangzhou Manchester United and Sanmenxia Aluminum Financial Investors by issuing shares to purchase assets. At that time, the assessed value of Sanmenxia Aluminum’s entire equity interest was approximately 15.568 billion yuan.

In addition, Jinjiang Group will transfer part of the equity interest in Fuda Alloy for a consideration of 190 million yuan. After all transactions, Sanmenxia Aluminum will become a wholly-owned subsidiary of Fuda Alloy, Jinjiang Group will become the controlling shareholder of Fuda Alloy, and Yan Zhenggang will become the actual controller of Fuda Alloy.

However, after two years of preparations, the parties to the transaction finally failed to reach an agreement on Sanmenxia Aluminum’s valuation and other plan matters, and Fuda Alloy’s major asset reorganization plan fell through.

As of the close on February 28, Jiaozuo Wanfang’s share price closed at 7.23 yuan/share, and the company’s market value is approximately 8.6 billion yuan, which is only about 55% of Sanmenxia Aluminum’s valuation.

Eight years of battle for control

As of September 31, 2024, Ningbo Zhongman Technology Management Co., Ltd.(hereinafter referred to as Ningbo Zhongman) and Zhejiang Ansheng Holding Co., Ltd.(hereinafter referred to as Zhejiang Ansheng) hold 11.87% and 7.44% of Jiaozuo Wanfang respectively. Shares, they are the first and third largest shareholders of Jiaozuo Wanfang, and the two are acting in concert.

Ningbo Zhongman is a wholly-owned subsidiary of Sanmenxia Aluminum, and Zhejiang Ansheng is 100% owned by Jinjiang Group. More importantly, after Jiaozuo Wanfang issued shares to Jinjiang Group to acquire Sanmenxia Aluminum, Ji Zhenggang completely won the control battle of Jiaozuo Wanfang, and at the same time achieved the listing of its Sanmenxia Aluminum assets.

The change of control of Jiaozuo Wanfang began as early as 2004. In 2004, Wanfang Group, the controlling shareholder of Jiaozuo Wanfang, planned the change of control for the first time on the grounds of equity for development. By the end of 2005, China Aluminum had acquired a 29% stake in Jiaozuo Wanfang and successfully entered the listed company.

In August 2014, Jiaozuo Wanfang acquired the entire equity of Wanji Energy for 1.7 billion yuan. The latter’s core assets and business are to provide exploration services and enjoy contractual rights for oil and gas blocks in Mongolia and the Kingdom of Morocco. At the same time, Jiaozuo Wanfang introduced Geogao Investment, the controlling shareholder of Wanji Energy, for strategic investment, and Jiaozuo Wanfang transformed into oil and gas resource exploration. After the transaction was completed, Geogao Investment became the second largest shareholder of Jiaozuo Wanfang and intends to continue to increase its holdings. China Aluminum, which has been in dispute over industry competition since the acquisition of Jiaozuo Wanfang, has begun to withdraw.

A month later, Geogao Investment’s shareholding in Jiaozuo Wanfang reached 17.247%, which was only 42 shares higher than that of China Aluminum. Since then, Jiaozuo Wanfang has entered a state of no controlling shareholder or actual controller. This also laid the lead for the subsequent battle for control of Jiaozuo Wanfang.

However, against the background of the sharp drop in oil prices, Jiaozuo Wanfang’s transformation was not smooth. In 2016, Geogao Investment relinquished control of Jiaozuo Wanfang. Jiao Zhenggang passed Hangzhou Jintou Jinzhong Investment Fund wholly-controlled by Jinjiang Group. The partnership (limited partnership)(hereinafter referred to as Jitou Jinzhong) finally transferred 190 million shares of Jiaozuo Wanfang and became the company’s largest shareholder.

At that time, the market believed that after Ji Zhenggang took over, he might load Sanmenxia Aluminum into Jiaozuo Wanfang to achieve asset listing. But before Jiao Zheng made the move, Jiaozuo Wanfang’s control began one step further.

In 2017, Jiayi Investment, the original third largest shareholder of Jiaozuo Wanfang, raised its name three times in a short period of time, with a shareholding ratio of 15%. In August of the same year, He Tai ‘an Cheng, controlled by Huo Bin, invested 1.087 billion yuan to purchase the 8.77% stake that Intercontinental Oil and Gas obtained from China Aluminum, becoming the third largest shareholder of Jiaozuo Wanfang and joining the battle for control.

In just one year, He Tai ‘an Cheng successfully became the largest shareholder by continuing to increase his holdings. Later, Huo Bin, the actual controller of He Tai’ an Cheng, also became the chairman of Jiaozuo Wanfang. Due to the similar shareholding ratios of the three parties, Jiaozuo Wanfang has maintained a deadlock of no real controller, and Jiao Zhenggang has not completely given up his pursuit of control over Jiaozuo Wanfang.

In 2021, He Tai ‘an Cheng will significantly increase their shareholding ratio through fixed-increase subscriptions, while Jindou Jinzhong and Jiayi Investment will reduce their shareholding ratio. In the second half of the year, Qi Zhenggang transferred the remaining 11.87% stake in Jiaozuo Wanfang held by Jintou Jinzhong to Ningbo Zhongman, and poured his left hand into his right hand. Jiaozuo Wanfang’s equity dispute entered halftime.

By 2023, Jiaozuo Wanfang will be reborn. In January of the same year, Zheng Zhenggang arranged for Wu Yongding to become the secretary of Jiaozuo Wanfang. Wu Yongding once served as investment manager of Jinjiang Group and served as senior executives in many Jinjiang companies. In November, Huo Bin, the real controller of He Tai ‘an Cheng, resigned as director, chairman and relevant member of the special committee under the board of directors of Jiaozuo Wanfang. After his resignation, Huo Bin no longer held any position in Jiaozuo Wanfang and its subsidiaries.

After that, Hetai Cheng went downward and Jinjiang City went upward.

Starting from March 11, 2024, Yan Zhenggang increased his holdings of Jiaozuo Wanfang through bidding transactions and block transactions through Ansheng Holdings. As of April 2, Ansheng Holdings ‘shareholding ratio reached 5%, which was announced. At the same time, due to a financial contract loan dispute with Tai ‘an, all equity held by Tai’ an has been subject to judicial freezing and waiting for freezing in October 2023, and there is a risk of passive reduction due to court enforcement.

At that time, when asked if Ansheng Holdings ‘listing would involve a change of control, Jiaozuo Wanfang replied to the Blue Whale News reporter that Jinjiang Group would not rule out the possibility of continuing to increase its holdings in the next twelve months.

After that, Ansheng Holdings continued to increase its holdings. As of the end of September 2024, Qi Zhenggang’s shareholding in Jiaozuo Wanfang through Ningbo Zhongman and Ansheng Holdings reached 19.31%. However, the shareholding ratio of He Tai ‘an Cheng dropped to 11.3% due to passive reduction, and Yan Zhenggang’s Jinjiang shareholding overtook He Tai’ an Cheng.

On February 13, Jiaozuo Wanfang announced that there was a risk of passive reduction in the 4.3% stake held by He Tai ‘an Cheng, and He Tai’ an Cheng’s shareholding continued to decrease. At the board of directors on March 2, the Jinjiang Department’s proposal to nominate by-election directors was passed. Currently, Jiaozuo Wanfang’s board of directors has 9 directors. After the by-election proposal is reviewed and approved by the shareholders ‘meeting, the Jinjiang Department’s directors will occupy more than half of the seats, and Qi Zhenggang will officially become the actual controller of Jiaozuo Wanfang.