My Fintech Empire

Chapter 231 [Wang Qingxiong is completely finished this time (510)]

When Fang Hong came to Qunxing Capital, there was another rumor about Hengtong Medicine.

Namely: if Hengtong Medicine cannot complete its IPO this year, it will fall back to the second method of seeking mergers and acquisitions, and Hengtong’s exit from a third-party acquisition will become unpredictable. In order to ensure a smooth exit, Zhongtai Capital has set up a catch-all clause: If it fails to go public, the enterprise must repurchase the equity held by Zhongtai Capital with a five-fold return on investment to ensure the smooth exit of the investor.

As soon as this rumor came out, it caused a thousand waves with one stone.

Since the end of 2007, Hengtong Pharmaceutical Group has been sprinting for A-shares, and has been exhausted for this. Because of the curse of a series of agreement clauses, Wang Qingxiong had to speed up the IPO process of Hengtong Pharmaceutical Group.

At the beginning of 2008, Hengtong Pharmaceutical Group formally submitted a listing application to the main board of the A-share market. However, considering the number of companies queuing up for the listing of the big A and the review process, the time to be listed before 2009 is already very tight.

Unexpectedly, last year a financial tsunami swept the world. After Hengtong Pharmaceutical's listing application was submitted, its application materials were actually in a state of "being left in the cold."

After a year of tossing, there is no way for A shares to be listed.

After being rejected by Big A, Zhong Tai asked Wang Qingxiong to repurchase the shares at a high price according to the agreement because he signed a gambling agreement with Zhong Tai Capital.

For Wang Qingxiong, he felt that he himself was at a disadvantage. Under such circumstances, both parties were dissatisfied, and the conflicts had existed half a year ago and continued to accumulate.

However, Wang Qingxiong held back and negotiated with Zhongtai Capital, hoping to allow another six months.

After successfully winning the extra half-year time limit, Wang Qingxiong turned to H-shares as the next best thing, and sought to go south to Hong Kong for listing if he could not get listed on A-shares.

However, the house leak happened to rain all night.

After half a year of tossing this year, switching to H shares can basically be declared a failure.

It is absolutely impossible for the current Zhongtai Capital to give Wang Qingxiong any more grace time. The reason why he was given half a year before was because there was no third party to take over.

But it’s different now. Qunxing Capital jumped out and shouted that it is willing to take over and has the strength to take over. Of course, Zhongtai Capital chose to withdraw with profit without hesitation.

As for what will happen to Hengtong Medicine and Wang Qingxiong, Zhongtai Capital will not care about it at all.

Huayu got up and went to his desk to fetch a document and handed it to Fang Hongdao: "This time I met with Liu Qizheng, the head of Zhongtai Capital, and obtained more specific terms and conditions of the series of agreements from him. Failure will directly lead to a series of clauses in its investment agreement being triggered in a domino-like chain to sign the liquidation priority clause, share repurchase clause, and drag-along clause with Zhongtai Capital.”

As private equity financing, it is natural for entrepreneurs and investors to sign a series of investment agreement term sheets, ranging from a dozen to dozens of items. In the game between entrepreneurs and investors, if investors take the lead Investors will form various constraints on entrepreneurial development in an all-round way to protect their own investment interests.

To put it bluntly, the investor's money is not so easy to get, and the price is very high, and the potential risk is not small.

The investor really dug a hole and set up a game without realizing it. How to handle entrepreneurs in the future depends entirely on the mood of the investor.

Hua Yu said with certainty: "Wang Qingxiong is completely finished this time."

Fang Hong browsed through the material report written in the liquidation preference clause, share repurchase clause and drag-along clause signed by Hengtong Pharmaceutical Group and Zhongtai Capital.

After a while, Fang Hong couldn't help but look at him with admiration and said: "Zhongtai Capital is also playing tricks, especially these three clauses are linked together. Once triggered, they will be triggered in a chain. Wang Qingxiong is indeed finished, and the fish on the chopping board is nailed."

【Liquidation priority clause】

If Hengtong Pharmaceutical triggers a liquidation event, the Series A preferred shareholder, that is, the investor (Zhongtai Capital), has the priority and the ordinary shareholder, that is, the entrepreneurial shareholder (Wang Qingxiong), will receive a return of 5 times the initial purchase price per share.

The liquidation here is not the bankruptcy liquidation that is usually understood because it is insolvent and cannot continue to operate, but it goes further. If the company is merged, acquired, sold controlling interests, and sold major assets, resulting in the company’s existing shareholders If the equity ratio of the surviving company is less than 50%, it will also be regarded as a liquidation event.

The terms of this agreement are down-to-earth. For example, if Hengtong wants to sell its equity, the equity in Zhongtai Capital's hands will be sold first, and Wang Qingxiong will line up behind.

【Terms of share repurchase】

If most shareholders of Class A preferred shares (Zhongtai Capital) agree, Hengtong Medicine should repurchase the issued Class A preferred shares in three years starting from the fifth year. The repurchase price is equal to the original issue price plus the announced but Unpaid dividends.

Of course, the triggering method of the share repurchase may not be the voting of preferred shareholders (Zhongtai Capital), but a specific time event as stipulated in the terms. For example, if the company fails to achieve an IPO within five years, it will trigger Share repurchase terms.

Now not only has the five-year period passed, but it has also been extended for half a year. Hengtong Medicine has undoubtedly triggered this clause due to a temporal event.

【Terms of Drag Sale】

Before Hengtong Pharmaceutical meets the IPO, if the majority of class A preferred shareholders (Zhongtai Capital) agree to sell or liquidate the company, the remaining class A preferred shareholders and ordinary shareholders should agree to this transaction and sell them at the same price and conditions shares.

These three clauses are all triggered now, and Wang Qingxiong is already a fish on the board.

The liquidation priority clause means that Zhongtai Capital can sell first, which is the first ring; the share repurchase clause is to ensure that Hengtong Medicine fails to go public, but Zhongtai Capital can also withdraw with profit, which is the second ring; the dragging right clause That is, if Zhongtai Capital wants to sell its equity in Hengtong Pharmaceutical to whomever it wants to sell, Wang Qingxiong must agree to the transaction.

Zhongtai Capital is now going to be sold to Qunxing Capital, and Wang Qingxiong is doing the same thing, and the most important thing is the word "leading sale", which means to whom Zhongtai Capital will sell to, Wang Qingxiong can still follow Zhongtai Capital at the same price and conditions. Sell ​​his shares together, because the difference requires Wang Qingxiong to sell his shares to compensate Zhongtai Capital, which is the last link.

Under the interlocking of this series of clauses, Wang Qingxiong has been completely involuntary. From the moment the listing failed, he has been unable to decide the future of Hengtong Medicine, which is completely controlled by Zhongtai Capital.

Fang Hong put the material aside, and immediately said: "Pack up a debt as soon as possible and put it in the shell company's profit and loss statement. Some non-performing asset packages of your Huayang Group will also be brought in."

Hua Yu nodded and asked bluntly, "How much?"

Fang Hong pondered for a moment, then said concisely: "Pack a 20 billion scale and go in."

Hua Yu nodded again: "Understood."

Packing 20 billion yuan of debt or non-performing asset packages into Ruihe is naturally for the third step of the strategy of annexing Hengtong Pharmaceutical Group, and the third step of the strategy formulated by Fang Hong is to completely clean up Wang Qingxiong, which is also the result of the entire situation. The most ruthless step inside.

After completing the second step of the "vacate the cage and change the bird" strategy, Hengtong Pharmaceutical's valuable things were packed and moved to the shell company Ruihe. At this time, Qunxing Capital accounted for 88% of the shares of Ruihe Company, and Wang Qingxiong was still in it. Holds 9% of the equity, and the remaining 3% is other small shareholders.

At this time, Wang Qingxiong is a minority shareholder compared to Qunxing Capital, but he still holds 9% of the shares and is still the second largest shareholder of the company, and he still has a lot of voice.

After the annexation of Hengtong Medicine, Fang Hong will carry out a large-scale restructuring of Ruihe. The biggest obstacle at this time will inevitably be Wang Qingxiong, the second largest shareholder. At this time, the first thing Fang Hong wants to do is not restructuring, but first Kick out Wang Qingxiong completely, otherwise he will always jump out and sing a naysayer, and even if he can't have a practical impact on your plan, he can still disgust you from time to time.

Fang Hong also firmly believes that Wang Qingxiong will definitely do this. After all, from his point of view, how can he be reconciled to the fact that the company he founded is swallowed up by the stars? How can there be no resentment in my heart?

For example, Wang Qingxiong, relying on his status as the second largest shareholder, asked for an audit of the accounts, instigated several small shareholders to demand a general meeting of shareholders, proposed to dissolve the company, etc. You have to play with him and accompany him through the process when he does this.

Although it will definitely not pass in the end, it is disgusting.

Therefore, he must be completely eliminated. The game in the capital market is not so black and white.

As a rational person, Fang Hong's choice is destined to do absolutely nothing about this matter, to wipe it out, and not to leave potential risks for himself.

Fang Hong will not have any psychological burden if he does such a great job, this is the reality of the capital market, not to mention that Wang Qingxiong himself is not a good bird, and he is not worthy of sympathy for such an end, so there is no psychological burden.

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