It is made by Sino-American Jialun. The following is a case analysis of the mixed ownership reform of Zibo Zhanggang Group
1. Reform background
According to the important instructions of the 18th National Congress of the Communist Party of China and the Third Plenary Session of the 18th Central Committee on comprehensively deepening the reform of state-owned assets and state-owned enterprises and spirit, a mixed-ownership economy in which state-owned capital, collective capital, non-public capital and other cross-shareholdings and mutual integration are an important form of realization of the basic economic system. Actively developing a mixed-ownership economy is not only the inevitable trend and direction for comprehensively deepening the reform of state-owned enterprises in the future, but also an important measure to solve the many practical difficulties currently faced by the state-owned economy and state-owned enterprises.
In order to actively respond to and implement the important instructions and spirit of the reform of state-owned assets and state-owned enterprises, the Shandong Provincial Party Committee and the Provincial Government decided to use Shandong Iron and Steel Group as the reform pilot, and Shandong Iron and Steel Group chose Zibo Zhanggang as the breakthrough point for the pilot. Therefore, the success or failure of the mixed ownership reform of Zibo Zhanggang is related to the reform decisions of state-owned enterprises and state-owned assets in Shandong as a whole, and has great reference significance for the reform of state-owned assets of other state-owned enterprises in Shandong. As the only comprehensive international consulting organization in China that focuses on state-owned enterprises in transition, Sino-American Jialun will lead Zibo Zhanggang's pilot mixed ownership reform.
2. Introduction to Zibo Zhanggang Group
Zhangdian Iron and Steel Plant was built in 1958. It is one of the 55 local backbone steel enterprises built during the national "First Five-Year Plan"; in 1997 Combined with Shandong Hutian Limestone Mine and Shandong Metallurgical Machinery Factory (trusteeship), it was established as Zhangdian Iron and Steel Plant; in 2006, in order to cooperate with Zibo City's strategic plan of "environmentally establishing the city", an overall relocation and reconstruction project was launched, and was completed in 2010. During the first phase of relocation, the new factory is located in Huantai Economic and Technological Development Zone, Zibo City, covering an area of ??approximately 2,400 acres. In 2008, Zhangdian Iron and Steel Plant became a wholly-owned enterprise under Shandong Iron and Steel Group.
At the end of 2013, with the approval of the Shandong Provincial State-owned Assets Supervision and Administration Commission, the original "Zhangdian Iron and Steel Plant" underwent corporate restructuring and was restructured into "Shandong Iron and Steel Group Zibo Zhanggang Co., Ltd." and on December 26 of the same year The industrial and commercial registration was completed on the same day. As of December 31, 2014, Zibo Zhanggang has 5 wholly-owned subsidiaries, 4 holding subsidiaries, 2 joint-stock subsidiaries and 1 entrusted management unit. It is one of the key local steel companies.
3. Overall scheme design
3.1 The overall idea of ??mixed ownership of Zibo Zhanggang:
Reform scope: with the main steel industry as the theme, choose Zibo Zhanggang High-quality assets participate in this reform.
Reform and reorganization: Through a series of reorganizations of equity, assets and debts, we will create a unified reform platform, optimize the corporate asset structure and resource allocation, improve the integrity of corporate assets, reduce the corporate asset-liability ratio, and make the post-reform Enterprises travel lightly.
Diversification of property rights: Introduce qualified external investors through a combination of stock and incremental methods, carry out shareholding of business managers, core technical personnel and business backbones, and actively explore and develop a mixed ownership economy .
Ownership structure: After the reform, the shareholding ratio of the state-owned equity of Shandong Iron and Steel Group (shareholding through Zibo Zhanggang), corporate managers, core technical personnel and business backbones, and external investors is 40% respectively. , 35%, 25%.
Employee placement: Zibo Zhang Gang terminates the labor contract with all employees on the job and pays economic compensation. The company will re-sign the labor contract with the employees after the reform. The working years of the employees before and after the enterprise reform will be recalculated; economic compensation After the reform, it will be converted into the employees' equity or debt rights in the company after the reform. Zibo Zhang Gang is still responsible for the unified management of those who are not on duty, as well as those who have resigned or retired, and their personnel relations and benefits remain unchanged.
3.2 Reform and Reorganization Arrangements
3.2.1 Equity Reorganization
Zibo Zhanggang increased capital of Zhanggang Iron and Steel by increasing its equity holdings in Oriental Star City. Oriental Star City was changed into a subsidiary of Zhanggang Iron and Steel, thus using Zhanggang Iron and Steel, which is engaged in the main steel industry, as a reform platform.
3.2.1 Asset Reorganization
3.2.1.1 Land Use Rights Reorganization
It is planned to adopt the method of auditing and evaluating the land use rights under the name of Zibo Zhang Gang. The method of capital contribution/transfer was reorganized from Zibo Zhang Gang to the name of Zhang Gang Iron and Steel, correspondingly increasing the net assets of Zhang Gang Iron and Steel participating in the reform; after the reorganization, the land use right certificates were uniformly changed to the name of the post-reform enterprise.
3.2.1.2 Debt restructuring
In this reform, it is planned to use 1.5-2.5 billion yuan of the 3.283 billion yuan borrowed by Zhang Gang Iron and Steel from the Shandong Iron and Steel Group Capital Center (finally Determined based on the audited evaluation value), the company was reorganized and divested to Zibo Zhanggang.
3.2.1.3 Net asset adjustment
Finally determine the net asset value of Zibo Zhanggang’s state-owned investment in the company after the reform; it is initially estimated to be between RMB 300-600 million. The results of the special reform audit evaluation shall prevail.
Considering the length of this article, the specific plans for the ownership structure and employee placement will not be detailed here. 4. Project Harvests
During my follow-up of Zhang Gang’s mixed-ownership reform project, thanks to the guidance of Mr. Liu and Mr. Pan, I felt a lot of emotion and gained a lot. Considering that old state-owned enterprises take a long time to build factories, have complicated personnel relationships, and involve many issues such as land, assets, and debts, I personally feel that the implementation of reform projects depends on the ideas. Once the ideas are clarified and the company's problems are clarified, the overall plan can be targeted and gain recognition from many parties.
So, what steps and methods are generally followed for specific state-owned enterprise reforms?
First of all: determine the main line. The overall idea needs to be clarified. A good mixed ownership reform plan includes three important points: equity reorganization, asset reorganization and employee placement, among which asset reorganization is particularly important.
Second: Pay attention to details. Based on issues such as equity, assets, and employees, we then dig into the key points of each area to find out corresponding problems and improvement methods.
Again, manage the relationship. Our project team sorted out the relationships: focusing on understanding land and liabilities, verifying assets; calculating the company's net assets, determining equity, and making employee placement plans.
Finally, find a solution. The focus of the plan is on assets, equity and employee placement, but it also needs to formulate the company's future development strategy based on financial calculations. Considering the reform of state-owned enterprises generally requires provincial approval, so the significance of the reform needs to be raised to reflect the leadership's foresight.
Because of the sensitivity of state-owned enterprise reform, within the company, only middle and senior leaders such as human resources, finance and business management are aware of it. Therefore, during the entire project advancement process, we did not conduct personnel interviews. The project team The focus was on two things: land and debt.
Apart from monopolistic state-owned enterprises, for state-owned enterprises in a perfectly competitive market, a large part of the assets of state-owned enterprises should be land. Therefore, the first important task for the project team stationed in the factory is to find out the company's land situation. Based on the audited financial statements provided by the company in the past three years, it is particularly important to understand the name of the parcel, land certificate number, area, nature and use, etc. The land needs to be classified according to the nature and use of the land. Generally speaking, what needs to be focused on is whether the land is transferred land or allocated land? Is it industrial land or residential land? If the land is transferred, no transfer fee is required as long as the use remains unchanged. However, if the land is allocated, part of the transfer fee needs to be paid when the land is expropriated. Whether it is industrial land or residential land, the land valuation differs several times or dozens of times. After clarifying the land situation, the value of the land needs to be determined based on the relevant policies of the local land bureau and surrounding land prices. The project team conducted a valuation based on the land price in Zibo at that time. According to the properties of the existing land, the valuation at that time was around 500 million. According to the land appraisal price when Zhang Gang was restructured for the first time in 2013, it was 2.4 billion, and the land premium was 1.9 billion. Finally, When calculating net assets, it can only be calculated based on the existing land value.
The debt situation is quite special. First, you need to know how much debt the company currently has; secondly, the specific nature of the debt; finally, you need to pay attention to the amount of debt that can be transferred and divested. Specifically for the Zhanggang project, the debts in the name of Zhanggang Iron and Steel reached 8.2 billion yuan, of which short-term borrowings reached 3.7 billion, and the annual financial expenses were as high as 320 million. The high financial expenses every year swallowed up the company's profits. Moreover, , We are still in a period of underestimation of steel. With Zibo Zhanggang's debt basically all in Zhanggang Iron and Steel, Zhanggang Iron and Steel still wants to develop sustainably, which poses a considerable test. Taking into account the special situation of Zhang Gang Steel. Therefore, the plan drawn up by the project team is to divest about 2.5 billion in debt to Zibo Zhanggang to reduce the operating pressure of Zhanggang Iron and Steel after its restructuring.
After clarifying the assets and debts, calculate the company's existing net assets, clarify the total net assets after the company's restructuring, design incremental and existing funds based on the equity ratio, and calculate the investment amount of employees and external investors. , and its proportion, etc.
5. Summary
There are many things involved in the mixed ownership reform of state-owned enterprises, but as long as we grasp the main line during the project implementation process, dig into the details, clarify the relationships, and make good planning for the post-reform strategy. I believe that the project team relies on Sino-American Jialun’s expertise in state-owned enterprise reform, coupled with good ideas and methods, and the overall plan for state-owned enterprise reform should be recognized by many parties.