Wanhua Industrial Group Co., Ltd. is a Chinese holding company. It was the parent company of

Wanhua Chemical Group Wanhua Chemical Group Co., Ltd. known as Wanhua Chemical and formerly Yantai Wanhua Polyurethane or Yantai Wanhua Polyurethanes or Yantai Wanhua, is a Chinese listed company in chemical industry. History The listed company was incorporated in 1 ...

and BorsodChem until 2018.

Yantai Yantai, Postal Map Romanization, formerly romanization of Chinese, known as Chefoo, is a coastal prefecture-level city on the Shandong Peninsula in northeastern Shandong province of People's Republic of China. Lying on the southern coast of ...

Municipal People's Government, via ''Yantai Guofeng'', still owned 39.497% stake of the company as of 2017. The government also sold 25% stake of the company to a consortium of

Pemex Pemex (a portmanteau of Petróleos Mexicanos, which translates to ''Mexican Petroleum'' in English; ) is the Mexican state-owned petroleum company managed and operated by the Mexican government. It was formed in 1938 by nationalization and expr ...

and

Deutsche Bank Deutsche Bank AG (), sometimes referred to simply as Deutsche, is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York Sto ...

in 2007.

History

Predecessors

Yantai synthetic leather factory

The predecessor of Wanhua Group Corporation, was Yantai synthetic leather factory ( or ). The plan to built the factory was approved by the in 1978. The construction started in 1980 and completed in 1983. The manufacturing technology was imported from Japan (from according to ''C&EN'') and was the first synthetic

polyurethane Polyurethane (; often abbreviated PUR and PU) refers to a class of polymers composed of organic chemistry, organic units joined by carbamate (urethane) links. In contrast to other common polymers such as polyethylene and polystyrene, polyurethan ...

leather factory of China. In 1988, the ownership of the factory was transferred from the to the Yantai Municipal People's Government.

Wanhua Group Corporation

In 1995, the factory was re-incorporated as a limited company as , or in short, Wanhua Group Corporation (). In 1998, a subsidiary Yantai Wanhua Polyurethane (now

) was formed. The subsidiary owned the

methylene diphenyl diisocyanate Methylene diphenyl diisocyanate (MDI) is an aromatic diisocyanate. Three isomers are common, varying by the positions of the isocyanate groups around the rings: 2,2′-MDI, 2,4′-MDI, and 4,4′-MDI. The 4,4′ isomer is most widely used, and i ...

production line of the factory. However, Wanhua Group Corporation retained several production line such as the supply chain of liquid chlorine, sodium hydroxide, pure water, steam vapour and electricity. The subsidiary became a listed company in January 2001. In October 2001, Wanhua Group Corporation formed another subsidiary Wanhua Industrial Group (see section below). In 2015, 39.497% shares of Wanhua Industrial Group was transferred from Wanhua Group Corporation to its parent State-owned Assets Supervision and Administration Commission (SASAC) of the Yantai Municipal People's Government, making Wanhua Group Corporation and Wanhua Industrial Group were sister companies. As of 2019, Wanhua Group is a live company. It owned the shares of Yantai Wanhua Hospital as well as other assets.

Wanhua Industrial Group

Foundation and privatization

In October 2001, Wanhua Group Corporation formed another subsidiary Wanhua Industrial Group (founded as , known as since 2008) as part of a

debt-to-equity swap Debt restructuring is a process that allows a private or public company or a sovereign entity facing cash flow problems and financial distress to reduce and renegotiate its delinquent debts to improve or restore liquidity so that it can continue ...

. Central Government owned

bad bank A bad bank is a corporate structure which isolates illiquid and high risk assets (typically non-performing loans) held by a bank or a financial organisation, or perhaps a group of banks or financial organisations. A bank may accumulate a large por ...

s managers

China Huarong China Huarong Asset Management Co., Ltd. known as just China Huarong () is a majority State-owned enterprise, state-owned financial asset management company in China, with a focus on distressed debt management. It was one of the four asset manage ...

() and China Cinda () were the minority shareholders. Cinda and Huarong later sold the shares of Wanhua Industrial Group. According to the company itself, Wanhua Group Corporation injected all the assets to Wanhua Industrial Group at the time of the debt-to-equity swap, which including the shares of Yantai Wanhua Polyurethane, Yantai Huali (), Wanhua Microfiber (), etc. Wanhua Industrial Group was the direct parent company of the listed company Yantai Wanhua Polyurethane since 2001 and effective in March 2003. Wanhua Industrial Group still owned 47.92% shares of the listed company as of 31 December 2017, before another company shake up in January 2018. Yantai Huali was a combined steam and electric power supplier of the listed company. In 2007, the Yantai city-owned Wanhua Group Corporation sold a further 25% stake of Wanhua Industrial Group to a consortium of

and one other investor. After the deal, as of 2007, Wanhua Group Corporation owned 50.50% shares of Wanhua Industrial Group, the aforementioned consortium, via a BVI company Prime Partner International Limited, owned 25%, and the rest (24.58%) was owned by Yantai Huali. By 2005, Yantai Huali was significantly (37.60%) owned by Wanhua Industrial Group. It was followed by Wanhua Group Corporation for 31.94% shares as well as

employee stock ownership Employee stock ownership, or employee share ownership, is where a company's employees own shares in that company (or in the parent company of a group of companies). US employees typically acquire shares through a share option plan. In the UK, Em ...

for the rest of the shares. But since December 2006, Yantai Huali was majority owned by the managers of the listed company. Yantai Huali acquired 15.04% shares of Wanhua Industrial Group from Huarong in 2005 and 9.54% shares from Cinda in 2006. The change in ownership of Yantai Huali, as well as acquiring the shares of Wanhua Industrial Group, was considered as an indirect employee stock ownership of the listed company. In 2013, Wanhua Industrial Group recapitalized another RMB4 billion and diluting the stake of the existing shareholders.

BorsodChem acquisition

Wanhua Industrial Group was interested to buy Hungarian company BorsodChem in the late 2000s. By 2009, Wanhua Industrial Group already acquired about two-thirds of

mezzanine capital In finance, mezzanine capital is any subordinated debt or preferred equity instrument that represents a claim on a company's assets which is senior only to that of the common shares. Mezzanine financings can be structured either as debt (typicall ...

of the BorsodChem. In 2011, Wanhua Industrial Group formally acquired BorsodChem. It was the biggest Chinese outbound investment deal in Hungary. The buyout of BorsodChem from private equity firms

Permira Permira is a global investment firm. Founded in 1985, the firm advises funds with assets under management of €60+ billion. The Permira funds have made approximately 300 private equity investments in four key sectors: Technology, Consumer, Ser ...

and

Vienna Capital Partners Vienna Capital Partners (VCP) is a corporate finance advisor and private equity investor headquartered in Vienna, Austria. The company is mainly focused on corporate finance, direct investment and trust management in Central and Eastern Europe coun ...

came at a financially bleak time for BorsodChem and allowed the company to avoid laying off its 2700 employees. The parent companies of the listed company, also hired the listed company to manage BorsodChem from 2011 to circa 2019.

split and reverse IPO

In 2017, the State-owned Assets Supervision and Administration Commission (SASAC) of the Yantai Municipal People's Government, transferred 39.497% stake of Wanhua Industrial Group to another city government-owned company ''Yantai Guofeng'' (). Yantai's SASAC acquired the aforementioned stake from its subsidiary Wanhua Group Corporation in 2015. (see above section) In January 2018 Wanhua Industrial Group was split into two companies: the surviving Wanhua Industrial Group as well as (). The latter became the new largest shareholder of the listed company instead. The latter also owned the assets that directly related to polyurethane production, including BorsodChem. However, the latter also reverse merged with the listed company in February 2019. As of 31 December 2018, after the split, Wanhua Industrial Group had a net assets of

RMB The renminbi (; symbol: ¥; ISO code: CNY; abbreviation: RMB) is the official currency of the People's Republic of China and one of the world's most traded currencies, ranking as the fifth most traded currency in the world as of April 2022. ...

4.930

billion Billion is a word for a large number, and it has two distinct definitions: *1,000,000,000, i.e. one thousand million, or (ten to the ninth power), as defined on the short scale. This is its only current meaning in English. * 1,000,000,000,000, i.e ...

. It owned 33.07% shares of Wanhua EnergySave Science and Technical Group ( or known as WanhuaEnergySav Science Technical Group) The shares of that company were formerly traded in Chinese OTC system

National Equities Exchange and Quotations The National Equities Exchange And Quotations (NEEQ) is a Chinese over-the-counter system for trading the shares of a public limited company () that is not listed on either the Shenzhen or Shanghai stock exchanges. The NEEQ exchange was also nickn ...

as NEEQ:838261 until June 2018.http://www.neeq.com.cn/uploads/1/file/public/201806/20180628183659_yyq7fyjxjr.pdf The company also owned 15.56% shares of Wanhua Microfiber as of 2018.

References

External links

* {{authority control Companies based in Shandong Plastics companies of China Chinese brands Government-owned companies of China Privatization in China Chemical companies established in 2001 Holding companies established in 2001 Yantai Chinese companies established in 2001