A recent lawsuit has cast a shadow over what seemed like a finalized acquisition deal for Shanshan Group. On the afternoon of October 21, the third creditor meeting for the bankruptcy restructuring case of Shanshan Group and Pengze Trade was held as scheduled. This meeting was anticipated to be a ceremony for businessman Ren Yuanlin, dubbed the "King of Private Shipping," to officially take control of Shanshan. Recently, Ren planned to invest ¥3.3 billion through capital operations to acquire the Shanshan conglomerate, which has total assets valued at approximately ¥69.5 billion, amid its ongoing debt crisis and family infighting.
However, just before the meeting, a lawsuit surfaced online: the former winning bidder, Saimeike Advanced Materials Co., Ltd. (hereinafter referred to as Saimeike), filed a claim after being excluded from restructuring investor eligibility, alleging unfair restructuring processes. Saimeike had participated deeply in two rounds of selection as an "industrial collaborator" and even emerged victorious in the first round, only to be unexpectedly removed from the consortium before signing the "Restructuring Investment Agreement" on September 29, without any opportunity for negotiation.
On October 15, Saimeike filed a lawsuit with the Ningbo Yinzhou District People's Court, suing Shanshan Group and all signatories of the "Restructuring Investment Agreement" (including Jiangsu New Yangzi Trading Co., Ltd., Jiangsu New Yangzi Shipping Investment Co., Ltd., Xiamen TCL Technology Industrial Investment Partnership, China Orient Asset Management Co., Ltd. Shenzhen Branch, Shanshan Group Ltd. administrator, Shanshan Group Ltd., and Ningbo Pengze Trade Co., Ltd.) requesting the declaration of this agreement as invalid. However, there is currently no information available indicating that the court has accepted the case; its status remains pending review.
This dispute complicates the control battle over Shanshan Co. (Ningbo Shanshan Co., Ltd. - stock code 600884.SH) and has raised market concerns regarding the fairness of the bankruptcy restructuring process. Who is pulling the strings behind this "last-minute player swap"? Is industrial synergy merely superficial? As events unfold, more intricate details of this financial drama may come to light.
As of October 22, Shanshan Co.'s stock price closed at ¥12.9 per share, giving it a market capitalization of ¥29.02 billion.
Entering the fray or facing changes? Shanshan Co. was renowned for its clothing business and transitioned into lithium battery materials in 1999 after acquiring the Anshan Thermal Energy Research Institute, evolving into a leading force in new energy materials. Yet, under the burden of Shanshan Group's staggering ¥12.6 billion in interest-bearing debt, Shanshan Group and its subsidiaries have been undergoing restructuring since February 2025, raising the question of "who will take over?"
According to Saimeike's lawsuit, following the announcement of Shanshan Group's intention to recruit investors in early June, the company partnered with Jiangsu New Yangzi Trading Co. and China Orient Asset Management Shenzhen Branch to form a consortium. Leveraging their "industrial synergy," they successfully emerged as one of three finalists from 17 interested parties.
This group included a consortium formed by Beijing Yixin Venture Capital Management Co., BOE Technology Group Co., and Changzhou Hecai Ganghua Zero Carbon Innovative Investment Partnership; China National Building Material Group; and the consortium of Jiangsu New Yangzi Trading, China Orient Asset Management Shenzhen branch, and Saimeike.
However, after qualifying, Saimeike found itself in an "information blackout." There was no communication regarding the subsequent selection process, the details of the restructuring agreement, or any equity distribution plans. It was only in September, via a notice from Shanshan Co., that Saimeike learned it had been ousted from the competition. The announcement indicated that the final investment consortium consisted of Jiangsu New Yangzi Trading and others, with no mention of Saimeike.
Saimeike emphasized that their industrial synergy value was ruthlessly cast aside after being utilized by others. "Our synergy proposal involving 'special graphite + negative materials' was crucial for the consortium to meet the selection criteria centered on 'industrial synergy.'"
They further stated that Jiangsu New Yangzi's core is trade, while China Orient Asset Management focuses on distressed assets, lacking any industrial resources in the new energy materials sector, unlike Saimeike, which specializes in core negative material businesses, indicating a weak synergy. This "borrowed qualification only to be discarded after being used" operation severely violates the selection rules.
Additionally, Saimeike's ousting resulted in significant losses. As a former qualifying member, it had the opportunity to purchase shares in Shanshan Co. at ¥11.44 per share, reaping the benefits as a leading entity in global negative materials. Being excluded meant not only wasting previous investment inputs on the synergy proposal and due diligence costs but also an estimated loss of over ten million yuan in equity returns.
According to Fu Jian, the director of Henan Zejin Law Firm, investors typically acquire equity at a low price during restructurings to assist companies in solving debt problems and restoring operations. Other shareholders might not oppose this because restructuring benefits company stability, minimizing larger losses from bankruptcy liquidation.
Despite the lawsuit, the restructuring process continued. The third creditor meeting for Shanshan Group and Pengze Trade’s combined bankruptcy restructuring still convened online on October 21 as scheduled via the "破慄子-破產案件一體化管理平臺" system.
Recent insider reports to "界面新聞" indicate that the issue of Saimeike's lawsuit was also raised during the third creditor meeting. "The selection committee stated that a vote was held regarding the change of investors (Saimeike's exit), and the restructuring administrator found no issues with the process, additionally mentioning that Jiangsu New Yangzi retained a certain share for Saimeike."
The "retained certain share" refers to the plan where Jiangsu New Yangzi would continue recruiting new investors possessing equivalent financial capability and industrial background, possibly transferring some or all of its held limited partner shares to them.
According to Zhonglun Law Firm, which serves as the administrator of the case, the selection committee evaluated Saimeike's submitted plan as lacking a controlling shareholder, with lengthy payment cycles and unsatisfactory terms, ultimately confirming Jiangsu New Yangzi as the actual controller, allowing TCL to replace Saimeike as the industrial investor. The court is currently reviewing the case and has urged Jiangsu New Yangzi to negotiate with Saimeike for resolution.
However, further revelations hint that behind the restructuring, an intricate scenario exists. An individual familiar with the restructuring agreement disclosed to "21世紀經濟報道" that the original bidder was not Jiangsu New Yangzi but rather Saimeike, which had initially bid and then invited Jiangsu New Yangzi into its ranks. Furthermore, Saimeike was the first to pay the bid deposit for the consortium.
What is Saimeike's background? According to public information, Saimeike was established in October 2007 as China Steel New Materials Co., initiated by China Minmetals Corporation. In February 2021, it restructured into a joint-stock company and rebranded as Saimeike Advanced Materials Co., Ltd. Saimeike focuses on the research and production of high-quality special graphite materials, having completed its D+ round of financing in 2023, with TCL Capital also participating in its A+ round in 2013. The company operates two major production bases, with products applied across industries like nuclear power, semiconductors, and photovoltaics.
Saimeike's major shareholder is Nandian Investment Holdings Ltd., which directly and indirectly holds 35.99% of its shares; the actual controller is Saimeike's chairman, Qu Ruihang, who holds 20.3%. Additionally, China Steel Group’s subsidiary, China Steel Technology Development Co., holds 20.14% of shares as state-owned capital.
Saimeike underwent two rounds of IPO counseling in 2023 and 2024. On July 20, 2023, it applied for IPO counseling registration, which was accepted, but later withdrew with Zhongxin Securities as the counseling underwriter after updating the progress three times. On July 25, 2024, Saimeike registered for counseling again, this time with Guotai Junan Securities.
Ren Yuanlin's ambitious acquisition strategy The prominent figure spearheading the restructuring investment is Ren Yuanlin, known as the "King of Private Shipping." His main investment platform, Jiangsu New Yangzi Trading Co., crucially leads a powerful consortium that includes Jiangsu New Yangzi Shipping Investment, TCL Industrial, and China Orient Asset Management Shenzhen Branch.
The transaction utilizes a combination of direct acquisitions, the establishment of partnerships with service trusts for procurement, and retained voting rights for remaining shares. Specifically, Jiangsu New Yangzi Trading will purchase 223 million shares of Shanshan (representing 9.93% ownership) directly, while TCL plans to invest up to ¥500 million to acquire 43.71 million shares (1.94%), entrusting voting rights to the investor shareholding platform.
"This restructuring exemplifies a cutting-edge, customized approach in the A-share market allowing small investments to leverage substantial control, and it suits complex scenarios with significant shareholder disputes," remarked Bai Wenxi, the vice chairman of the China Enterprise Capital Alliance.
In total, the consortium led by Ren Yuanlin aims to take over Shanshan for an overall price of ¥3.284 billion, acquiring control over 23.36% of Shanshan's shares. Reports suggest that by June 2024, Shanshan Group's total assets stood at approximately ¥69.513 billion, with total liabilities of ¥39.895 billion, reflecting a high asset-liability ratio of 57.39%.
The acquisition also brings in considerations of industry synergy. As a leader in lithium battery negative materials and polarizer fields, Shanshan Co. is a core supplier for TCL Technology's semiconductor display operations. TCL notes that this investment is grounded in recognizing Shanshan's long-term potential, aiming to strengthen ties and enhance supply chain resiliency and collaboration, aligning with its strategic focus on semiconductor displays and new energy photovoltaics.
Additionally, Ren Yuanlin's Yangtze River Shipbuilding has initiated plans to invest ¥10 billion in LNG clean energy projects, strategically linking with Shanshan's core businesses. Ren Yuanlin's entry into Shanshan is not coincidental; this veteran businessman has honed his capital operation skills over decades in the market.
Born in 1953, Ren finished high school in 1972 and became an apprentice at a shipyard three years later. He later pursued studies in ship design and graduated in Economic Management from Jiangsu Radio and Television University in 1986. With his technical talent and proficiency in English, he was promoted to deputy director of the shipyard at age 29. In 1997, he led the privatization efforts of the shipyard, injecting market vitality into the enterprise. In 2007, he successfully brought Yangtze River Shipbuilding to the Singapore Exchange, solidifying his reputation as the "King of Private Shipping."
In 2020, Ren stepped back as honorary chairman of Yangtze River Shipbuilding, passing leadership to his son, Ren Letian. Despite this transition, their capital ventures continued; in 2021, they spun off investment operations, establishing Yangtze River Financial Holdings Co.; in 2022, they took Yangtze River Financial public on the Singapore Exchange, creating a dual-listing platform for "shipbuilding + finance," with Ren serving as executive chairman.
Amidst restructuring and family turmoil, Shanshan Co. remains a coveted entity in the capital markets. The company showed significant resilience, achieving revenue of ¥9.858 billion in the first half of 2025, marking an increase of 11.78% YoY, and net profits of ¥207 million, up 1079.59%. Excluding non-recurring gains, net profits totaled ¥169 million, reflecting a 605.24% increase.
This impressive performance primarily stemmed from its two core businesses: negative materials and polarizers, both witnessing robust growth, altogether contributing net profits totaling ¥415 million. Moreover, losses from non-core businesses have decreased.
By the end of June 2025, Shanshan Co. reported total assets of ¥45.077 billion and net assets of ¥21.854 billion, indicating a 1.27% increase from the previous year. Despite a shortfall of over ¥20 billion compared to peak asset levels, this achievement reflects commendable progress amid adversity.
Recent activities signal renewed confidence from the company. In August, Shanshan Technology signed a long-term cooperation agreement worth over ¥10 billion involving negative materials with Chuneng New Energy, shaking the industry. Furthermore, the overseas project in Finland for a 100,000-ton negative materials production capacity is nearing execution.
Both core businesses have shown profitability, indicating Shanshan Co.'s adeptness at risk management, combined with relatively stable governance. The company remains committed to its dual-core strategy, focusing on enhancing core competitiveness while navigating challenges. Transparency in operations has been emphasized to bolster shareholder and investor confidence regarding future prospects.
Shanshan Co.'s impressive interim report serves as a morale booster, resonating with previous statements made by Zhou Ting during a restructuring hearing expressing determination to persevere rather than capitulate.
Currently, the struggle for control over Shanshan Group reaches a critical phase. Should the court ultimately declare the restructuring agreement void, Ren Yuanlin's plan to assume leadership may fail, and Saimeike's ability to reclaim its consortium position through legal channels will be pivotal in shaping this specialty graphite enterprise's journey to capitalization. Do you think Saimeike can reclaim its consortium position?
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