KaiPhos plans to acquire Guizhou Kaiyang Chemical, which is part of Yankuang

Thread Content

Recently, Shandong Yankuang Group put up for sale 70% of the state-owned equity and debts amounting to 4.375 billion yuan held by its subsidiary, Guizhou Kaiyang Chemical Co., Ltd., at the Shandong Province Property Rights Exchange Center. Kailin Co., Ltd., a subsidiary of Guizhou Kailin Holding Group with a history of 60 years, is actively preparing to acquire the state-owned equity and debts held by Shandong Yankuang Group in Guizhou Kaiyang Chemical Co., Ltd., based on the needs of its own development, in order to restructure and integrate Guizhou Kaiyang Chemical Co., Ltd. If the acquisition is successful, KAIPHOS Group’s synthetic ammonia production capacity will reach 1 million tons. The integration between KAIPHOS’s phosphate and coal chemical industries will become more complete, thereby further enhancing the company’s core competitive capabilities. Guizhou Kaiyang Chemical Co., Ltd. is a large-scale modern coal chemical enterprise jointly established in September 2006 by Shandong Yankuang Group and Guizhou Kailin Co., Ltd. With a total investment of 4.806 billion yuan, the project was completed and put into operation in 2014. It is now a holding subsidiary of Shandong Yankuang Group Coal Chemical Company, and its main product, synthetic ammonia, has an annual production capacity of 500,000 tons. The process technology route, key equipment, and control system technology of this project are at the leading level in China. Its main product, ammonia synthesis, possesses strong market competitiveness, making it one of the coal chemical plants in the country with the largest capacity for ammonia synthesis. It is understood that the transfer of Guizhou Kaiyang Chemical Co., Ltd. was listed for public announcement at the Shandong Province Property Rights Exchange Center on December 29, 2017. KaiPhos Group has submitted an application to that property rights trading center, intending to acquire, in cash or in the form of equity worth no less than 1.6 billion yuan, the 4.375 billion yuan in claims and 70% of the shares held by Shandong Yankuang Group in Kaiyang Chemical. Upon completion of the restructuring and integration, Guizhou Kaiyang Chemical Co., Ltd. will become a wholly-owned subsidiary of KaiPhos Group, while Yankuang Group will become the second-largest shareholder of KaiPhos Group. Following the capital increase and share expansion, KaiPhos Co., Ltd. will gain an additional 500,000 tons of synthetic ammonia production capacity, bringing the total synthetic ammonia production capacity of the KaiPhos Group to 1 million tons. This will provide a reliable supply of synthetic ammonia raw materials for KaiPhos’ fertilizer production capacity of 5.5 million tons. Furthermore, the success of this restructuring will not only help to effectively reduce the asset-liability ratio of KaiPhos Co., Ltd., ensure the company’s operational efficiency, optimize its capital structure, lower the production costs of Kaiyang Chemical, and guarantee sustainable and stable production, but it will also accelerate the transformation and upgrading of KaiPhos’ coal chemical industry, laying a solid foundation for further strengthening and expanding the company. Author/Source: Yahuahua Coal Chemicals