NEW YORK, Oct. 10, 2016 /PRNewswire/ -- In Aug. 2016, the 9th Fluorochemical Industry Development Forum was held in Jiujiang City, Jiangxi Province. CCM also participated in it.
In early Aug., 2016, the USITC notified the USDC of their final ruling on the Chinese HFCs anti-dumping suit. The good news for Chinese manufacturers is that the USITC ruled that HFC components imported from China had not threatened or caused injury to local business, despite ruling that HFC blends had.
In Aug. 2016, Do-Fluoride announced to construct a AEV power assembly project. In light of measures taken by the company such as capital increase in Hebei Hongxing, annulment of acquisitions of Yuhang Bus and Zhongdao Energy, CCM believes that it is accelerating AEV production.
In Aug. 2016, CSIC claimed that its IF5 and MFP businesses have developed maturely. It plans to carry out R&D of PFPE, perfluoroketone, fluorine-enriched pharmaceutical intermediates, fluorine-enriched special gas and the suchlike, based on domestic strategically emerging industries.
In Aug. 2016, Shanghai 3F equity transfer issue was settled finally, transferee targeted at CCDC, which then will take the place of Huayi and become the company's 1st largest shareholder.
In Aug. 2016, Zhejiang Yongtai announced the completion of production line for the pilotscale experimentation of photoresist (colour filter film for panel display). In addition, it is constantly advancing a new fluorine-enriched LCD materials project. All this signals that the company is enlarging the development of LCD materials business.
In Aug. 2016, the NDRC collected public opinions on the Cyclic Development Guiding Plan, in move to primarily establish a green, circular and low-carbon system nationwide by 2020. This is expected to enhance the control over chemicals industry. Specifically, the segmented fluorochemicals business will face both challenges and opportunities.
In early Aug., 2016, Zhejiang Juhua announced the creation of a partnership with Juhua Group Technology Centre. This cooperative effort will focus on the development of special polyfluoroether, anti-fingerprint agent, and HFE, so as to explore the premium-marketed, refined, and special fluorochemicals business.
In July 2016, China's HCFC-22 market went down greatly, impacted by the close of peak sales and the decreased prices of raw materials.
In July 2016, China's fluorite market maintained stability. However, impacted by the overall weak demand, the business turned to be flat.
Shanghai 3F signs key assets reorganisation agreement framework
On 5 Aug., 2016, Shanghai Huayi (Group) Company (Huayi), Shanghai 3F New Materials Co., Ltd. (Shanghai 3F) and China Culture Development (Group) Company (CCDC) signed the Key Assets Reorganisation Agreement Framework.
According to the agreement, Huayi will transfer its 89,388,381 shares (= 20% of the total) in Shanghai 3F to CCDC, for USD273.10 million (RMB1.81 billion). Meanwhile, the transaction this time involves assets sale and injection, aimed at promoting Shanghai 3F's business transformation and development.
According to CCM's research, the transaction will be carried out step by step: 1. assets injection; 2. assets sale; 3. equity transfer.
About CCDC
Founded in April 2003, it is a state-owned enterprise mainly engaged in: operation of culture innovation industrial parks; investment, financing, technology R&D and technical service related to culture and relevant business; publications and related packaging/ decoration, and manufacturing of related equipment and materials.
From this equity transfer, CCDC will replace Huayi and become the controlling shareholder of Shanghai 3F. However, in light of the completely different businesses – fluorochemicals vs. culture/ education – where Shanghai 3F will go remains open to question.
Huayi, Shanghai 3F and CCDC have already reached a primary consensus about the cooperation: Shanghai 3F will sell its fluorochemicals business to Huayi by cash, and meanwhile will take CCDC's culture/ education assets by cash OR by share issuing.
"In future, we will develop Shanghai 3F into a dominant platform for culture/ education business development and integration," stated CCDC, "It is expected to establish an all-round education business, from preschool, K12 (from kindergarten to Grade 12) to occupational education, to build online and offline combined service system and to integrate quality education resources at home and abroad, so as to gradually grow into a culture/ education full chain platform."
Regarding the assets reorganisation issue, the 3 sides will sign additional assets sale/ purchase agreements to make the implementation clear. Since the reorganisation is comparatively complicated, involving large assets and staff arrangement, the details are still under negotiation. Hence, Shanghai 3F has applied to the Shanghai Stock Exchange for continuing trade suspension from 13 Aug., (trade to restart and preproposal about the reorganisation to be unveiled at the same time on 10 Oct.).
About Huayi's chemicals assets
In March 2015, Huayi input its core chemicals assets into its Double Coin Holdings Ltd. for USD1.75 billion (RMB11.6 billion), and achieved back door listing. Specifically, it included:
- 100% shares of 5 subsidiaries, including Shanghai Huayi Energy Chemical Co., Ltd., Shanghai Huayi Fine Chemical Co., Ltd., Shanghai Huayi New Material Co., Ltd., Shanghai Tianyuan (Group) Co., Ltd. and Shanghai Huayi Group Investment Co., Ltd.
- Partial shares of 2 subsidiaries, including 55% stake in Shanghai Huayi Information Technology Co., Ltd. and 30% stake in Shanghai Huayi Group Finance Co., Ltd.
Now Huayi divides its chemicals assets into 3 parts, covering energy chemicals, fine chemicals and chemicals service, and the corresponding products involve basic chemicals, fine chemicals and related new materials. In addition, it also develops service business to support chemicals business, such as trade, logistics, information technology, solutions and financing.
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