Wen | Ni Yuping, a weekly magazine of "Finance and Economics"
Edited | Sun Yue
Fosun United Health Insurance Co., Ltd. (hereinafter referred to as "Fosun United Health Insurance") is the second largest shareholder or change. Recently, according to ali auction judicial display, the 19.5% equity of Fosun United Health Insurance held by the executor Guangdong Yihua Real Estate Development Co., Ltd. (hereinafter referred to as "Yihua Real Estate") was auctioned online. The starting price is 140 million yuan, which is only 70% of the appraisal price. The Intermediate People's Court of Shenzhen Municipality, Guangdong Province, reminded that according to the information provided by Fosun United Health Insurance, the company had a shareholder donation, which may have an impact on the value of the equity held by the executor.
With the shareholders disclosing the details of the donation, Fosun United Health Insurance's urgent need to replenish its capital has also been spread out. In the third quarter of 2021, its solvency indicator fell by 9.4 percentage points from the previous quarter to 142.85%.
Yihua Real Estate has the same share of different rights, 19.5% of the shares at a discount auction
It is reported that the equity auction stemmed from the debt dispute between Yihua Real Estate and Guangzhou Chenming Financial Leasing Co., Ltd. The Intermediate People's Court of Shenzhen Municipality, Guangdong Province, ruled that the 19.5% equity interest in Fosun United Health Insurance held by Yihua Real Estate, the executor, was auctioned and sold to pay off the debt. According to the information released by Ali Judicial Auction, the Intermediate People's Court of Shenzhen Municipality, Guangdong Province, will start the auction at 10 o'clock on January 28, with an auction cycle of one day. The mark-up is 700,000 yuan. Its appraisal price is 200.82 million yuan, and the starting price is 140.60 million yuan, which is equivalent to a 70% discount sale.
According to public information, Fosun United Health was founded by six shareholders, including Shanghai Fosun Industrial Investment Co., Ltd. (hereinafter referred to as "Fosun Production and Investment"), Yihua Real Estate, Ningbo Xizi Asset Management Co., Ltd. (hereinafter referred to as "Xizi Asset"), Chongqing Dongyin Holding Group Co., Ltd. (hereinafter referred to as "Dongyin Holdings"), Shanghai Fengshi Asset Management Co., Ltd. (hereinafter referred to as "Fengshi Assets") and Dean Diagnostic Technology Group Co., Ltd. (hereinafter referred to as "Dean Diagnostics"). Among them, Yihua Real Estate holds 19.5% of the shares, which is its second largest shareholder.
(Image source: Fosun United Health official website)
In the process of the development of Fosun United Health, due to the grant behavior of the two shareholders, Yihua Real Estate formed a situation of "different rights for the same shares", which in turn affected the equity auction price.
According to the supplementary materials submitted by Fosun United Health to the court, the shareholder Fosun Production and Investment co., Ltd. donated RMB350 million on December 30, 2019, and Fengshi Assets donated RMB300 million on December 28, 2020. Two donations were made as capital for Fosun United Health to support business development. The resolution of the shareholders' meeting involving two donations made it clear that non-donating shareholders do not enjoy the shareholders' equity formed by the proportion of their respective equity in the donated cash assets.
Yihua Real Estate also told the court that in the two donations, it did not enjoy the shareholders' rights and interests corresponding to the grants, and signed the Supplementary Agreement on Shareholders' Grants with other shareholders, stipulating that in the future, Fosun Production and Investment would be given reciprocal compensation for the donation and its tax costs and capital occupation costs in a reasonable and fair manner, including but not limited to direct transfer methods, price difference compensation methods, equivalent grant obligations (exempted), and increased equity ratio. Yihua Real Estate suggested that the above circumstances may affect the buyer's final interest in Fosun Insurance, so the applicant court truthfully disclosed it at the time of auction.
In summary, the Intermediate People's Court of Shenzhen Municipality, Guangdong Province, said that "there are shareholder donations in the company, which may have an impact on the value of the equity held by the executor". The Court also pointed out in the appraisal report that in practice, Yihua Real Estate is not the same share and the same rights (the articles of association and industry and commerce have not been changed), and the impact of the 650 million donation is 126.75 million yuan under the premise that the information is provided as true and valid.
Repeated capital increases to "replenish blood" failed Fosun United Health lost money for four years
Caijing Weekly noted that the purpose of the two donations was to replenish the capital reserve of Fosun United Health Insurance. Fosun Production and Investment pointed out in the donation proposal that with the rapid growth of business scale, the capital problem of Fosun United Health Insurance has become increasingly obvious, and the current solvency has seriously limited the company's business development.
According to the proposal, after the completion of the donation, by the end of 2019, its capital reserve will increase from 0 yuan to 350 million yuan, and the forecast comprehensive and core solvency adequacy ratio will increase from 88% to 122%; at the end of 2020, with the donation of 300 million yuan of Fengshi assets, Fosun United Health Insurance capital reserve will increase from 350 million yuan to 650 million yuan, and the solvency indicator is expected to increase from 140% to 161%.
According to the solvency report for the third quarter of 2021, the indicator of Fosun United Health Insurance was 142.85%, a decrease of 9.4 percentage points from the previous quarter.
In fact, in order to supplement the solvency of the capital, Fosun United Health Insurance has issued a capital increase plan three times, but none of them have been successful. According to the information on the official website, in 2018, it intends to issue 385 million additional shares, and the registered capital increases to 885 million yuan; in 2019, it announced that it would increase the capital by 160 million yuan, which was subscribed by the original shareholders Fosun Production and Investment and Dean Diagnostics; in 2021, Fosun United Health Insurance announced again that it intends to issue 114.5 million shares. From the current point of view, the registered capital has not changed, it is still 500 million yuan.
However, on December 17, 2021, the China Banking and Insurance Regulatory Commission approved the approval of Fosun United Health's fundraising of subordinated fixed-term debts. Agreed to raise 10-year subordinated term bonds, with a fundraising scale of not more than RMB330 million.
Solvency is in a hurry, or it is also affected by losses. It is reported that Fosun United Health Insurance was established in January 2017 and has since its establishment, with more losses and less profits. From 2017 to 2020, Fosun United Health's total loss was RMB243 million. In the third quarter of 2021, its net loss was 6.7737 million yuan. However, judging from the cumulative situation in the first three quarters, it achieved a total net profit of 43.9174 million yuan.
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