In the acquisition of Hualan Group Co.,Ltd.'s controlling stake, buyer Lin Wei appears to have maximized leverage. Through Xutong Investment, Lin Wei plans to spend 174 million yuan to secure control of Hualan Group via a "5.79% share transfer + 13.71% voting rights delegation" model. Notably, Lin Wei adopted a GP (General Partner) structure, potentially gaining control of Hualan Group with less than 4 million yuan—a leverage ratio that could exceed 100x. However, the stability of this control structure remains questionable.
Amid a bullish secondary market, A-share listed company control transactions have surged. Wind data shows that as of December 15, over 170 listed companies have seen changes in actual controllers, including transfers via agreements, voting rights delegation, free transfers, and judicial auctions.
The "minority stake + voting rights delegation" model has gained traction in control transactions, as seen with companies like Hualan Group. This approach offers key advantages: 1. **Cost Efficiency**: By separating economic rights (dividends) from control rights (voting power), buyers can achieve control at minimal cost, reducing premium payments. 2. **Flexibility for Sellers**: When sellers face share freezes or减持 restrictions, this model enables indirect control transfers. Additionally, keeping voting rights below 30% avoids triggering mandatory tender offers and regulatory delays.
However, risks persist. Control stability hinges on the robustness of voting rights delegation agreements. Loopholes or disputes over termination clauses could lead to governance deadlocks like "dual-board" conflicts. Regulators also scrutinize "irrevocable" clauses and potential减持 rule circumvention, requiring full disclosure of delegation terms and contingencies.
Many target companies in control transfers also grapple with operational challenges or legacy issues. Investors should assess whether ownership changes truly mitigate these risks.
**Lin Wei’s High-Leverage Play for Hualan Group** Lin Wei’s Xutong Investment signed a share transfer agreement with Hualan Group’s seven controllers to acquire 5.79% (8.51 million shares) at 20.41 yuan/share (total 174 million yuan). Concurrently, four controllers delegated another 13.71% voting rights to Xutong, granting it 19.5% total voting power and making Lin Wei the new controller.
The GP structure magnifies leverage: Xutong’s GP, Shenzhen Xuwu Investment (70% owned by Lin Wei), holds just 1% of Xutong’s 400 million yuan capital—implying Lin Wei’s effective outlay may be under 4 million yuan for near-20% control. Directly acquiring 20% would cost ~600 million yuan, suggesting 150x+ leverage.
**Control Stability Concerns** Hualan Group, a comprehensive engineering service provider, went public in July 2021. Pre-IPO, its 11 controllers held 41.45% collectively, but post-lockup, multiple controllers exited their一致行动人 agreements, reducing the group to seven.
Post-acquisition, questions linger: Does Lin Wei’s GP-based control genuinely enhance stability? Hualan’s post-IPO performance has slumped, with revenue dropping from 1.092 billion yuan (2020) to 605 million yuan (2024) and net profit turning negative.
New减持 rules bar controlling shareholders of companies failing分红 thresholds (Hualan’s 3-year分红 <30%) from market减持. Yet,解除一致行动人 relationships might enable indirect减持 via协议转让, warranting investor vigilance.
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