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image source: tuchong creative

the birth of the salt lake "giant" is imminent.

recently,salt lake shares(000792.sz) announced that the company's actual controller, the state-owned assets supervision and administration commission of qinghai provincial government (hereinafter referred to as "qinghai provincial government sasac"), the controlling shareholder qinghai state-owned assets investment management co., ltd. (hereinafter referred to as "qinghai state-owned assets investment management co., ltd.") and china minmetals corporation (hereinafter referred to as "minmetals group") and its subsidiaries signed the "general cooperation agreement on the establishment of china salt lake group".

the announcement also mentioned that the draft bankruptcy reorganization plan of qinghai salt lake haina chemical co., ltd. (hereinafter referred to as "haina chemical") and qinghai salt lake magnesium co., ltd. (hereinafter referred to as "salt lake magnesium") was approved by all parties, passed by the creditors' meeting and approved by the court, which is one of the conditions for the effectiveness of this cooperation.

haina chemical and salt lake magnesium were once subsidiaries of salt lake co., ltd. however, due to huge losses that seriously dragged down the performance of salt lake co., ltd., they entered bankruptcy reorganization procedures in 2019 and were later taken over by qinghai huixin asset management co., ltd. (hereinafter referred to as "huixin asset"). however, the draft bankruptcy reorganization plan has not yet been implemented.

in addition, the 630 million shares held by qinghai guotou, the controlling shareholder of salt lake co., ltd., are still pledged, and the cooperation can only continue after the corresponding pledge release procedures are completed.

how many hurdles do we have to overcome to welcome the “chinese holy lake”?

the prelude to the "big mac" of salt lake has begun

the qaidam basin in qinghai is the region with the richest salt lake resources in my country. qinghai province's use of salt lake resources to develop the salt lake industry can be traced back to the 1950s. after decades of development, qinghai has built my country's largest potash fertilizer production base, forming five industrial clusters: potash salt, sodium salt, magnesium salt, lithium salt, and chlor-alkali.

the construction of a world-class salt lake industrial base took shape as early as 2021. this year, the people's government of qinghai province and the ministry of industry and information technology jointly issued the "action plan for qinghai to build a world-class salt lake industrial base (2021-2035)", forming a collaborative mechanism for jointly building a world-class salt lake industrial base.

the following year, the qinghai provincial government proposed to introduce large central enterprises to speed up the establishment of china salt lake group. in april this year, salt lake co., ltd. announced that qinghai state investment group was planning to carry out strategic cooperation in the salt lake industry with china minmetals group, and the two sides would jointly build a world-class salt lake industry base.

this time, the "general cooperation agreement on the establishment of china salt lake group" is a continuation of the previous strategic cooperation.

according to the provisions of the "general cooperation agreement", the state-owned assets supervision and administration commission of the qinghai provincial government, qinghai state investment corporation and china minmetals corporation plan to jointly establish china salt lake industry group co., ltd. (tentative name, subject to the final approval of the company registration authority, hereinafter referred to as "china salt lake group").

in the future, the registered capital of china salt lake group will reach 10 billion yuan, and the equity structure is planned to be: china minmetals group holds 53.00%; the state-owned assets supervision and administration commission of qinghai provincial government holds 18.73%; and qinghai state investment group holds 28.27%.

specifically with regard to the share transfer, china salt lake group plans to purchase 681 million shares of salt lake group held by qinghai guotou and its joint actor wuhu xinzeqing investment management partnership (limited partnership) (hereinafter referred to as "wuhu xinzeqing") in cash. the transfer price is tentatively set at 13.558 billion yuan.

if the transfer is completed, the controlling shareholder of salt lake co., ltd. will be changed from qinghai state-owned investment to china salt lake group, and the actual controller of the company will be changed from the state-owned assets supervision and administration commission of qinghai provincial government to china minmetals group.

on september 9, professor li jin, an expert on soe reform and development, told times finance that soe reform has been characterized by specialized restructuring, and the restructuring trend has intensified since this year, which is also the highlight of the reform. the specific feature of the restructuring between china minmetals group and salt lake co., ltd. is the combination of central and provincial soes, and this model will continue to increase in the future; central soes may continue to accelerate the integration of the industrial chain through mergers and acquisitions.

"this type of restructuring has little resistance and is easy to succeed. for local governments, with the participation of central enterprises, tax revenue remains local, so they will naturally be motivated. local state-owned enterprises may have multiple defects such as insufficient technical strength, insufficient funds, and poor management. the support of central enterprises will revitalize these enterprises." li jin further analyzed.

the china minmetals group, which built the salt lake "giant", also had its layout in the salt lake sector early on.

in september 2009, china minmetals salt lake co., ltd. (hereinafter referred to as "china minmetals salt lake") was established. the following year, it launched relevant technical research on the yiliping lithium salt lake project in qaidam, qinghai province. it was not until 2017 that it overcame the difficulties in large-scale production of high magnesium-to-lithium ratio separation technology and fully entered the stage of industrialized salt lake lithium extraction.

in 2021,ganfeng lithium(002460.sz) acquired 49% of the equity of china minmetals salt lake co., ltd. through acquisition and operated this project together with china minmetals group.

according to ganfeng lithium's financial report, from 2021 to 2023, minmetals salt lake achieved revenue of 179 million yuan, 5.362 billion yuan, and 3.863 billion yuan, and net profits of 69.4695 million yuan, 3.599 billion yuan, and 2.396 billion yuan, respectively. even in the first half of 2024 when lithium prices plummeted, minmetals salt lake still achieved revenue of 840 million yuan and net profit of 442 million yuan.

historical issues are mentioned again

it is worth noting that the "general cooperation agreement" has not yet come into effect. the transaction still needs to go through the processes of relevant parties reporting to the competent state-owned assets supervision and management department for review and approval, the relevant assessment report completing the state-owned assets filing, and passing the operator concentration review. in addition, the "general cooperation agreement" also stipulates an effectiveness condition.

that is, the draft bankruptcy reorganization plan of haina chemical and salt lake magnesium was recognized by all parties, passed by the creditors' meeting and approved by the court.

haina chemical and salt lake magnesium were originally subsidiaries of salt lake co., ltd. in october 2019, they entered bankruptcy reorganization procedures due to their inability to repay debts due and insufficient assets to repay all debts. they were no longer included in the consolidation scope of salt lake co., ltd. that year.

in the 2019 annual report of salt lake co., ltd., the losses recognized by haina chemical and salt lake magnesium when entering the bankruptcy reorganization process were 42.657 billion yuan, which were included in non-recurring gains and losses.

in january 2020, an asset package including equity and accounts receivable of haina chemical and salt lake magnesium was acquired by huixin asset for 3 billion yuan. huixin asset has since become the largest shareholder of haina chemical and salt lake magnesium. salt lake co., ltd. still holds 11.56% of the shares of salt lake magnesium.

although salt lake co., ltd. divested its equity, debt and other assets from salt lake magnesium and haina chemical after judicial reorganization, salt lake co., ltd. still has new accounts receivable and other receivables from salt lake magnesium and haina chemical since october 2019.

as of the end of 2020, salt lake co., ltd. had new accounts receivable of rmb 645 million and rmb 16 million from salt lake magnesium and haina chemical, and other receivables of rmb 259 million and rmb 64 million, all of which were formed after salt lake magnesium and haina chemical entered the bankruptcy reorganization procedure.

at that time, salt lake co., ltd. stated that salt lake co., ltd.'s accounts receivable and other receivables from salt lake magnesium and haina chemical totaled 984 million yuan, which were common debts in the bankruptcy reorganization of salt lake magnesium and haina chemical in accordance with the relevant provisions of the enterprise bankruptcy law. among them, the company's common debt to salt lake magnesium was 904 million yuan, and its common debt to haina chemical was 79.4464 million yuan.

since 2020, salt lake chemical has continued to make provisions for bad debts for haina chemical and salt lake magnesium due to bankruptcy reorganization and common benefit bonds.

by the end of the first half of this year, the accounts receivable and other receivables of salt lake co., ltd. to salt lake magnesium were 386 million yuan and 260 million yuan respectively, and the bad debt reserves were 325 million yuan and 234 million yuan respectively; the accounts receivable and other receivables to haina chemical were 67.3498 million yuan and 56.0782 million yuan respectively, and the bad debt reserves were 47.5551 million yuan and 49.7204 million yuan respectively. in addition, the prepayments of salt lake co., ltd. to salt lake magnesium and haina chemical reached 34.2831 million yuan and 4.2911 million yuan respectively.

nearly five years after bankruptcy reorganization, haina chemical and salt lake magnesium are still closely connected with salt lake co., ltd. in business. according to a report by the national business daily in 2021, the limestone mining rights used by haina chemical at that time also belonged to salt lake co., ltd.

in 2021, when explaining the reasons for the formation of related party occupation of funds, salt lake co., ltd. stated that some of salt lake co., ltd.'s subsidiaries and related divested assets are still located in the chaka industrial park, and have close upstream and downstream business relationships. under the unique park supply and demand environment and industrial chain connection, the mutual supply of products between salt lake co., ltd. and related divested assets is inevitable, and some new accounts receivable have been generated due to such operating transactions.

the formation of other receivables is to ensure the smooth completion of asset divestiture. during the judicial reorganization, salt lake co., ltd. advanced part of the wages, social security, natural gas and other expenses for huixin assets and its subsidiaries during a certain transition period, and formed related transactions.

to date, it can be seen in the announcement of salt lake co., ltd.'s expected daily related transactions in 2024 that salt lake co., ltd. and its subsidiaries and huixin asset's subsidiaries are still engaged in the procurement of raw and auxiliary materials, product sales, labor services, maintenance services, railway transportation and shipment, provision of mechanical processing, land leasing, and commissioned processing services.

salt lake co., ltd. estimates that the related-party transactions in 2024 will be the purchase and sale of products worth 1.46 billion yuan and the provision or acceptance of services worth 999 million yuan. the amounts incurred in the previous year were 2.244 billion yuan and 618 million yuan, respectively.

on september 9, times finance sent an interview letter to salt lake co., ltd. regarding the restructuring of haina chemical and salt lake magnesium, but no reply was received as of press time.

loss-making huixin assets and unfinished restructuring

"the company promises to complete the establishment of an independent social insurance account within three months from the date when its reorganization plan is approved by the people's court and implemented." in july 2021, haina chemical and salt lake magnesium made the above commitment.

in its 2023 annual report, salt lake co., ltd. disclosed that due to the failure to complete the employee resettlement work, the social security accounts of salt lake co., ltd. and huixin asset had not yet completed independent management at that time and were still managed by salt lake co., ltd. on behalf of the company. after the employee resettlement work was launched, the independent management of the social security accounts would be carried out together.

by the end of the first half of this year, salt lake said that the medical insurance account of salt lake magnesium has been independently reported and paid, and other social security account separation matters are being standardized in combination with employee placement. regarding the employee placement of haina chemical and salt lake magnesium, salt lake said it plans to further improve the specific content of the "employee placement plan", refine the employee placement method, clarify the placement process management and other matters, and promote the standardization of labor relations.

on september 11, a staff member of huixin asset management told times finance that the social security of haina chemical and salt lake magnesium was paid by huixin asset management, and the two companies were also managed by huixin asset management. as for the progress of the reorganization, the staff member said that it needed to be kept confidential.

it has been more than 4 years since huixin asset took over the asset package of salt lake co., ltd. why has the draft bankruptcy reorganization plan of haina chemical and salt lake magnesium been delayed in implementation, becoming a hurdle for china minmetals group to take over salt lake co., ltd.?

when huixin asset was first established, it may have played the role of a "white knight".

the asset package of the above-mentioned salt lake co., ltd. has been put on the auction table since november 2019, but no one was interested in it in the public auction for nearly two months. on december 27, 2019, more than 10 days after huixin asset was established, the administrator of salt lake co., ltd. and huixin asset signed the "asset acquisition framework agreement", stipulating that huixin asset would "guarantee" the auction or transfer of the above-mentioned assets.

in january 2020, after the above-mentioned asset package had experienced five price reductions and six unsold events, huixin asset "acquired" it at a price of 3 billion yuan, and agreed that huixin asset would acquire 70,751,800 shares of converted shares during the reorganization of salt lake co., ltd., totaling 595 million yuan.

however, as of june 2021, huixin asset has not paid the above-mentioned share transfer consideration to the administrator of salt lake co., ltd. at that time, salt lake co., ltd. stated that since huixin asset is mainly a shareholding platform, it currently has no actual business operations, huixin asset's main subsidiaries are still in the reorganization process, and its reorganization investor recruitment work has not been completed, resulting in huixin asset's financial difficulties and inability to pay the transfer price of the increased shares in a timely manner.

the consideration for the above-mentioned transferred shares was not paid until june 2022. in fact, the financial situation of huixin asset itself is not optimistic. in 2023, it achieved revenue of 8.312 billion yuan, a net loss of 1.881 billion yuan, and a net asset of 9.972 billion yuan at the end of 2023.

from the perspective of equity structure, the shareholders of huixin asset are haixi prefecture state-owned capital investment and operation (group) co., ltd. (hereinafter referred to as "haixi prefecture state-owned capital investment"), qinghai industrial development investment fund co., ltd. (hereinafter referred to as "qinghai industrial development investment fund"), and golmud investment holding co., ltd., with shareholding ratios of 42.31%, 38.46%, and 19.23%, respectively; the actual controller is the haixi mongolian and tibetan autonomous prefecture state-owned assets supervision and administration commission.

as the controlling shareholder of huixin assets, haixi state investment group achieved net profits of 49 million yuan, 20 million yuan, and 23 million yuan in 2019-2021. according to the official website of haixi state investment group, as of august 2023, the company had a registered capital of 3.588 billion yuan, total assets of 15.742 billion yuan, and operating income of 277 million yuan.

qinghai industrial investment is a subsidiary of qinghai state investment group, and the general manager of huixin asset also serves as the chairman of qinghai state investment group.

qinghai guotou achieved revenue of 12.326 billion yuan and net profit of 2.354 billion yuan in the first half of 2024. as of the end of the reporting period, there were still 8.038 billion yuan of assets restricted due to loan pledges and other reasons. this may include the 630 million shares of salt lake co., ltd. held by qinghai guotou. as of the end of the first half of this year, the above 630 million shares were still pledged, accounting for 99.85% of its shares.

regarding this part of the pledged equity, salt lake shares also pointed out in its announcement that the transfer to china minmetals group can only be implemented after obtaining a written consent letter from the rights holder and completing the corresponding pledge release procedures.

against this background, salt lake magnesium's bankruptcy reorganization has only held the first creditors' meeting since january 2020, and the second creditors' meeting has been postponed several times.

feida environmental protection(600526.sh) is one of the creditors of salt lake magnesium. in its semi-annual report this year, it stated that salt lake magnesium is seeking to take over the asset companies and wait for the second creditors' meeting to confirm the suspension of part of the debt. the second creditors' meeting of salt lake magnesium has been postponed several times due to the epidemic and other reasons, and the date of the meeting has not yet been determined.

however, with the accelerated advancement of the world-class salt lake industrial base, the draft bankruptcy reorganization plans of haina chemical and salt lake magnesium may be implemented more quickly.