Today, BOE wants to sell Fusheng energy. BOE only finds out that the 560 million tons of coal resources that elder sister should have on her account are all included in her own name. As soon as the news came out, the mother-in-law hurriedly devalued 2.8 billion yuan.
However, careful financial professionals found that the listing price of Jusheng energy was only 776 million yuan, and if calculated according to the selling price, for BOE energy, whose coal assets are not as good as theirs, it may be further impaired by 1.8 billion yuan.
560 million appear and disappear
In the evening of December 26, 2019, BOE issued the announcement on listing and transferring 100% equity of Erdos Changsheng Energy Investment Co., Ltd., in which it said that in 2011, Erdos will allocate no less than 1 billion tons of coal resources for a 5.5-generation AM-OLED production line to be invested and constructed in Erdos, inner Mongolia.
For this reason, BOE has established energy project subsidiaries BOE energy and Jusheng energy to jointly develop the coal resources with third-party professional energy companies.
BOE stressed that the Department of land and resources of Inner Mongolia Autonomous Region issued a letter to the company in January 2015, clearly stipulating that 510 million tons of allocated resources will be allocated to Jusheng energy.
However, on December 27, Haohua energy released a notice, saying that it found that its subsidiary, BOE energy, actually owns 450 million tons of allocated resources in bayannu mine field - the 960 million tons disclosed earlier was wrong.
In February 2015, when Haohua energy acquired 30% equity of BOE, it was disclosed that BOE had 960 million tons of allocated resources in bayannu well field, that is to say, there was a mistake in the figure, which should be 450 million tons in fact.
In October 2011, one month after the establishment of BOE, its controlling shares were transferred. In the appraisal report on the acquisition of assets issued by Haohua energy in 2011, Haohua Energy said that it has signed an investment framework agreement with BOE and Ordos Municipal government, according to the investment framework agreement, BOE has established BOE energy in Ordos City, which will allocate 450 million tons of coal resources in the future and be responsible for the development and construction.
After four years, BOE has generated 560 million tons of energy.
In February 2015, Haohua energy plans to invest 1.72 billion yuan to acquire 30% equity of BOE energy. At that time, the acquisition announcement showed that the market value of the above 960 million tons of coal resources was 5.681 billion yuan.
Since the Dagong rating report, Haohua energy has since issued bonds, as well as credit rating, which all adopt the term of one billion tons of bayannu minefield.
Further impairment is still required in 2019
Haohua energys master attitude towards the 1 billion tons of coal resources can be described as a kind attitude.
Why does BOE apply for exploration right as the only development subject? BOE said it is because the peoples Government of Inner Mongolia Autonomous Region has a regulation: a planned well field is developed by only one project subject.
As the only development subject, BOE also paid 416 million yuan of revenue from the transfer of exploration right for 510 million tons of coal resources on behalf of wisheng energy. However, the money is borrowed by Qisheng energy, not advanced by BOE.
From 450 million tons to 960 million yuan, and then back to 450 million tons, the Wulong of Haohua energy is not small. In order to correct the historical mistakes, Haohua energy first claims that BOE has only 450 million tons of coal exploration rights; then, it traces the accounting errors.
After acquiring another 30% equity in 2015, Haohua energy holds 50% equity in BOE energy, which will be included in the consolidated statement this year. In this verification, more than 510 million tons of resources have been calculated. Haohua energy plans to correct accounting errors on the financial data since 2015. Since 2015, the virtual increase of consolidated assets is about 2.8 billion yuan, the virtual increase of minority shareholders equity is about 1.4 billion yuan, and the virtual increase of net profit attributable to the parent company in 2015 is about 1.4 billion yuan.
As mentioned above, according to the consulting report of Beijing Guorong Xinghua Mining Right Appraisal Co., Ltd. on August 31, 2014, the market value of 960 million tons of coal resources in bayannu mine field is 5.681 billion yuan, and the purchase price of 30% equity of BOE by Haohua energy is 1.72 billion yuan, if converted into 100% equity, the value of 960 million tons of coal resources recognized at that time is 5.7 billion yuan.
In 2011, when Haohua energy acquired 20% equity of BOE energy for the first time, the market value of 1 billion tons of coal resources was estimated to be 9.8 billion yuan. In three years, the valuation has shrunk by 4.1 billion yuan, or 58%.
However, according to wind information, from October 2011 to August 2014, the national comprehensive coal price index decreased from 201 to 136, with a decrease rate of only 32%.
In 2015, after Haohua energy consolidated BOE energy, the intangible assets increased by 5.3 billion yuan, that is to say, BOE recognized the intangible assets of exploration right in the book by 5.3 billion yuan. The recognition of accounting errors will cut off 2.8 billion yuan of intangible assets and leave 2.5 billion yuan of book value of intangible assets.
Financial professionals pointed out that at the level of consolidated statements, the impairment of 2.8 billion intangible assets may not be enough.
BOE announced on December 26, 2019 that it would sell the sister of the two companies established together, wisheng energy. According to the announcement of BOE, the value of 960 million tons of coal resources in bayannu mine field is 1378.6248 million yuan (about 1.44 yuan / ton) after being divided according to the retention.
That is to say, the book value of BOEs existing 450 million tons of coal resources is only 648 million yuan according to the evaluation price. However, after Haohua energy has devalued BOEs 2.8 billion intangible assets, the book value is still 2.5 billion yuan. Compared with the market value of 648 million yuan, it needs to be devalued by 1.85 billion yuan to meet the market evaluation.
In addition, BOEs listing price for the proposed sale of Fusheng energy is 15 yuan per ton of resources, and the listing price for the exploration right of 560 million tons of coal resources is 776 million yuan. BOE energy has only 450 million tons of resources, and there is no reason why it is more expensive than Jusheng energy. For example, the impairment caused by Haohua energys Wulong may not only involve the statements retroactive to 2015 - the impairment of intangible assets in the consolidated statements since 2015 is 2.8 billion yuan, and the net profit attributable to the parent in 2015 is 1.4 billion yuan. If BOEs Fusheng energy is sold at a price of 776 million, it may force Haohua energy to reduce the intangible assets in the 2019 consolidated statement by another 1.8 billion yuan, and reduce the net profit attributable to the parent company by 900 million yuan in 2019. Source: First Financial Editor: Wang Xiaowu NF
In addition, BOEs listing price for the proposed sale of Fusheng energy is 15 yuan per ton of resources, and the listing price for the exploration right of 560 million tons of coal resources is 776 million yuan. BOE energy has only 450 million tons of resources, and there is no reason why it is more expensive than Jusheng energy.
If BOEs Fusheng energy is sold at a price of 776 million, it may force Haohua energy to reduce the intangible assets in the 2019 consolidated statement by another 1.8 billion yuan, and reduce the net profit attributable to the parent company by 900 million yuan in 2019.