(Source: Visual China)
On the evening of December 10, Tsinghua Unigroup's listing platform Unigroup (002049. SZ), Tsinghua Unigroup (000938. SZ) and others also issued an announcement that they received a notification letter from the manager of Tsinghua Unigroup that they had identified Beijing Zhilu Asset Management Co., Ltd. (hereinafter referred to as "Zhilu Capital") and Beijing Jianguang Asset Management Co., Ltd. (hereinafter referred to as "Jianguang Asset") as a consortium of lead parties, which were strategic investors of 7 companies including Tsinghua Unigroup, and would promote the signing of the reorganization investment agreement and the formulation of the draft reorganization plan with them.
According to the announcement, the selection was carried out extensively under the supervision and guidance of the court, in accordance with the principles of openness, fairness and justice, and the final result was obtained after several rounds of selection of the reorganization investment plan. The draft reorganization plan shall be submitted to the creditors' meeting for voting and approval, and shall not take effect until it is approved by the people's court.
This means that more than a year after the much-publicized Tsinghua Unigroup debt crisis broke out, the restructuring and recruitment of strategic investors has finally settled today. A consortium composed of Beijing Zhilu Capital and Beijing Jianguang Assets took over the chip giant with a total value of 300 billion yuan.
Tsinghua Unigroup was founded in 1993, formerly known as Tsinghua University Science and Technology Development Corporation, and was restructured in 2005. The group has a number of holding subsidiaries such as Tsinghua Unigroup, Tsinghua Unigroup Guowei, Tsinghua Unigroup Zhanrui, Yangtze River Storage, Xueda Education, etc., involving chips, storage, security, cloud computing and other fields, and is one of the largest high-tech industry groups in China.
As of the end of 2019, the total assets of the Group were close to 300 billion yuan.
Since 2009, Tsinghua Unigroup has introduced a new management team, and Zhao Weiguo's Jiankun Group has invested 49% of the equity of Tsinghua Unigroup, and has served as president and chairman successively. After Zhao Weiguo took over Tsinghua Tsinghua Group, he has been holding high, making a series of acquisitions in the chip industry, initiating nearly 60 mergers and acquisitions, and investing more than 100 billion yuan. Tsinghua Unigroup has privatized Spreadtrum and Ruidike, which are listed on the NASDAQ, acquired New H3C, and in 2016, it jointly established Changjiang Storage to carry out the memory chip field, completing the company's strategic deployment of "from core to cloud".
Zhao Weiguo said in a speech on the official website of Tsinghua Unigroup that as of the end of 2018, Tsinghua Unigroup was the world's third largest mobile phone chip design company, accounting for more than 20% of the global SIM card chip market share, and was also one of China's leading cloud service providers. Tsinghua Unigroup has become one of the most successful high-tech enterprises in China.
However, Tsinghua Unigroup's series of mergers and acquisitions plans have used a large number of assets, making the group's accumulated liabilities too large and the financing structure unbalanced, and the problem began to erupt in the fourth quarter of 2020.
On December 14, 2020, Tsinghua Unigroup announced that due to the shortage of liquidity, Tsinghua Unigroup's "18 Unigroup 04" failed to pay interest on time and was unable to repay the principal and interest of the US$450 million debt, which constituted a material default. Its Unigroup Also said that the default could lead to a cross-default of its issued DOLLAR bonds.
Tsinghua Unigroup also disclosed that as of June 30, 2020, the total interest-bearing debt of Tsinghua Unigroup was RMB56.161 billion, and the total interest-bearing debt of Tsinghua Unigroup and its consolidated subsidiaries was RMB156.691 billion. As of June 30, 2020, Unigroup had obtained a total of RMB145.233 billion in bank credit, of which RMB72.236 billion was used and RMB72.998 billion was unused, and RMB295.758 billion was granted by Tsinghua Unigroup and its consolidated subsidiaries, of which RMB140.243 billion was used and RMB155.516 billion was unused.
Rating agency China Chengxin International said that although Tsinghua Unigroup has continued to maintain a diversified business pattern since 2020, the status of the main business industry has continued to lead, and the development of chip business has received strong external support, the capital expenditure pressure of Tsinghua Unigroup's projects under construction is relatively large, and the debt scale caused by previous external mergers and acquisitions is at a high level.
As of June 2020, the total liabilities of Tsinghua Unigroup reached 202.938 billion yuan, an increase of about 44 times compared with the end of 2012. Among them, more than half are current liabilities, short-term borrowings and non-current liabilities due within one year totaling 79.428 billion yuan, and the financing structure is mismatched, which ultimately leads to the pressure on Unigroup's cash flow today.
With the outbreak of the debt crisis, Tsinghua Unigroup urgently needs to restructure and recruit strategic investors, and investors who intend or are instructed to take over the "hot potato" gradually surface.
In January this year, in order to resolve the debt crisis, the working group launched an open recruitment of strategic investors for Tsinghua Unigroup. On 16 July 2021, Tsinghua Unigroup issued an announcement stating that it had received the Civil Ruling and Decision Letter delivered by the Beijing No. 1 Intermediate People's Court, and the Beijing No. 1 Intermediate People's Court ruled to accept the application of relevant creditors for the reorganization of Tsinghua Unigroup, and appointed the liquidation team of Tsinghua Unigroup Group Co., Ltd. as the administrator of Tsinghua Unigroup.
On July 20, the manager of Tsinghua Unigroup issued an announcement on the recruitment of strategic investors, saying that this time it is necessary to lead strategic investors to undertake the core industries of Tsinghua Unigroup or Tsinghua Unigroup as a whole. The announcement shows that the introduction of strategic investors needs to undertake the core industries of Tsinghua Unigroup or Tsinghua Unigroup as a whole.
On August 27 this year, upon the ruling of the Beijing First Intermediate People's Court, tsinghua group and its subsidiaries Beijing tsinghua tsinghua unigroup, Beijing tsinghua unigroup capital management co., LTD., Tibet unigroup instrument investment co., LTD., Tibet unigroup Zhuoyuan, Tibet Unigroup Communication Investment Co., Ltd., Tibet Unigroup Chunhua Investment Co., Ltd. (collectively referred to as "Unigroup and other seven companies") were substantively merged and reorganized, and the manager of Tsinghua Unigroup was appointed as the substantive merger and reorganization manager of seven companies, including Tsinghua Unigroup.
Subsequently, according to Tsinghua Unigroup, as of the registration deadline of September 5, a total of 7 interested investors have registered to participate, "Follow-up, the manager will further verify the qualifications of strategic investors, carry out due diligence and anti-due diligence, and conduct comprehensive and in-depth negotiations with strategic investors, select the best of the best, and accelerate the determination of the final strategic investors." ”
On October 18, the official website of Tsinghua Unigroup released the news that under the auspices of the Beijing Municipal First Intermediate Court, the first creditors' meeting of the substantive merger and reorganization of seven enterprises including Tsinghua Unigroup was held. According to the minutes of the meeting on the same day, the current scale of Unigroup's claims reached 108.181 billion yuan.
Then, at the end of October, Caixin reported that the seven companies participating in the restructuring of Tsinghua Unigroup were state-owned assets in Guangdong, Beijing, Wuxi and Shanghai, the central enterprise China Electronics, the private equity fund Zhilu Jianguang Consortium, the Zhejiang State-owned Assets and Alibaba Group Consortium, and finally only zhejiang State-owned Assets and Alibaba Consortium and Zhilu Jianguang Consortium were shortlisted for the next round of bidding. Bloomberg reported that the acquisition would cost about $8 billion.
Until November, China tended to have Alibaba and Zhejiang State-owned Assets take over Tsinghua Unigroup, bloomberg reported on December 9, but recently, the United States has tightened regulation of Chinese companies listed in the United States, including Alibaba, which has raised concerns.
According to the data, on December 2, EASTERN TIME, the US Securities and Exchange Commission (SEC) issued an announcement that it has revised and improved the implementation rules for the submission and disclosure of information related to the Foreign Company Accountability Act (HFCAA). This means that the management policy for the China Stock Exchange will enter the substantive implementation stage. The revised HFCAA rules require foreign companies listed in the U.S. to disclose whether they are owned or controlled by a government entity. Additional disclosures are also required in the annual report for themselves or foreign operating entities.
It is reported that because the United States is tightening audit requirements for listed companies in the United States, if Tsinghua Unigroup is under the umbrella of Alibaba, it may expose the leading Chinese chip group to the risk of disclosing sensitive information disclosures. Therefore, Tsinghua Unigroup will be handed over to Zhilu Capital and Beijing Jianguang Asset Consortium to take over.
It is understood that the market value of the relevant listed companies of Tsinghua Unigroup has been close to 200 billion yuan. At present, Tsinghua Unigroup owns three listed companies of Tsinghua Unigroup, Tsinghua Unigroup and Xueda Education, and Tsinghua Unigroup Zhanrui, which plans to IPO on the Science and Technology Innovation Board, also belongs to Unigroup. In addition, Tsinghua Unigroup also indirectly holds part of the equity of Yangtze River Storage. The requirements for the receiver are very high.
Finally, after repeated screening, a consortium of organizations such as Beijing Zhilu Capital and Jianguang Assets replaced the Ali consortium and officially took over Unigroup.
In addition, Tsinghua Unigroup issued an announcement on the evening of December 10 that Tsinghua University intends to transfer 100% of the equity of Tsinghua Holdings to Sichuan Energy Investment Group. Tsinghua Holdings currently holds 51% of the equity of Tsinghua Unigroup, and due to the restructuring of seven enterprises including Tsinghua Unigroup and this gratuitous transfer, there is uncertainty about the changes in the company's equity structure and the actual controller situation.
The investment leaders of Tsinghua Unigroup are Zhilu Capital and Jianguang Asset Management, both of which are private equity fund management companies in the field of hard technology, headquartered in Beijing.
According to Tianyan, the two companies belong to the investment platform of the Zhongguancun Rongxin Financial Information Industry Alliance (hereinafter referred to as the "Rongxin Alliance"). The Rongxin Alliance was led by Li Bin, a former executive of SMIC who graduated from the School of Economics and Management of Tsinghua University, and the governing units include chip industry chain enterprises such as SMIC, North Huachuang, and Changdian Technology.
Among them, Zhilu Capital was established in 2016, the company focuses on semiconductor core technology and other emerging high-end technology investment, covering the semiconductor value chain, mobile technology, automotive electronics, robot intelligent manufacturing and internet of things five major areas, investors include high-tech companies, large financial institutions and family funds. In June, Wise Road Capital announced a $1.4 billion acquisition of South Korean chipmaker MagnaChip, which attracted industry attention and eventually stalled the merger process due to the intervention of the United States; earlier this month, Wise Road Capital acquired an interest in four factories in the mainland for $1.46 billion. (For details, see the titanium media App above: "The US government strongly intervened in the review, and the Chinese-funded 9.2 billion yuan acquisition of the South Korean chip factory "Megana" case regeneration variables" )
Founded in January 2014, CCB Asset Management co-ordinates 51% and 49% of the shares respectively, with a cumulative investment of more than RMB30 billion, including the establishment of a joint venture with NXP to establish Power Semiconductors, Which focuses on power semiconductor devices, and the ACQUISITION of NXP's RF power business for US$1.8 billion.
Correspondingly, the market has been rumored that due to the scale and huge debt of Unigroup, it is likely that the consortium formed by Alibaba will take over. However, Bloomberg reported that because Ali shares were issued in Hong Kong and the United States at the same time, it was necessary to disclose relevant information to the outside world, and did not meet the conditions for taking over Unigroup. In contrast, although Zhilu Capital and Jianguang Assets are slightly less well-known and have private equity status, they have more advantages in the breadth of their layout in the semiconductor field and the depth of their cultivation.
In early 2017, Zhilu Capital and Jianguang Asset Management jointly acquired NXP's standard parts business for US$2.75 billion, which was later renamed Nexperia. After the completion of the acquisition, the two consortiums will connect domestic mobile phone, home appliance manufacturers and supply chain enterprises to help increase sales, and at the same time expand the packaging and testing plant. Subsequently, in 2019 and 2020, these assets were sold to the domestic listed company Wingtech Technology (600745. SH), which has enhanced the voice of domestic chip companies in the industrial chain.
Not only that, in fact, the two funds have cooperated in a number of investment and merger cases, mainly selecting the semiconductor field in the field of domestic and foreign subdivision tracks, enterprise targets with liabilities, through investment and acquisition of good integration, grafting operation and management capabilities, and providing financial support, etc., and then sold to domestic semiconductor companies, thereby improving the discourse power of China's semiconductor industry chain, enhancing asset value, and also turning enterprises into beneficial resources.
In recent years, Zhao Weiguo and his Tsinghua Unigroup have frequently made moves, and have been called "semiconductor merger giants" by the media.
According to incomplete statistics, in just 6 years from 2013 to 2019, Tsinghua Unigroup spent huge sums of money to acquire a number of chip companies. Among them, including the privatization of two domestic chip manufacturers Spreadtrum and Rui dike from the US stock market for 16.2 billion yuan in 2013, the acquisition of 51% of the equity of New H3C in 2015 for 2015, and the acquisition of French chip connector manufacturer Li Lianxin for more than 17 billion yuan in 2018. In addition, Tsinghua Unigroup has also invested heavily in Yangtze River Storage and invested in memory chip manufacturing.
However, some industrial investors do not recognize Zhao Weiguo's playing style, believing that he does not understand semiconductors and industrial laws. In their view, the ratio of investment and return within the semiconductor industry is unstable, and more volatile is the time. Tsinghua Unigroup's long-term large investment, slow return of funds, and poor cash flow have led to an increasing increase in the group's debt. The deficit continued to grow, eventually leading to a full-blown debt crisis.
At a closed-door summit attended by the Titanium Media App in October this year, in response to the chaos caused by the growth of the chip industry, Wei Shaojun, professor at Tsinghua University and dean of the Beijing Superstring Memory Research Institute, pointed out, "The chip industry cannot become a 'pig on the vent', and there can be no curve overtaking in this field, we can only follow the law of industrial development, return to the origin of the industry, return to the origin of technology," and do a good job in the development of integrated circuits in a down-to-earth manner." ”
It is worth noting that so far, Tsinghua Unigroup has not disclosed the company's 2020 annual report and full-year audit report.
(This article was first published on titanium media App, author | Lin Zhijia)