Since 2018, the wave of mixed-ownership reforms of state-owned enterprises in Tianjin has continued to advance, and the progress in mixed-ownership reform of Northern Trust, a local trust company in Tianjin, has received much attention.
On October 8, the reporter was informed that the capital increase and share expansion project issued by Northern Trust on the Tianjin Equity Exchange officially entered the investor confirmation stage, in which CCI Holdings was selected as one of the strategic investors in Northern Trust's mixed-ownership reform. In the future, CCI Holdings will also become an important partner of Northern Trust, and assist it in cooperation in the trust business, financial market and wealth management, and intrinsic asset investment in an appropriate way.
Introduced 4 Strategic Investors
The reporter was informed that the mixed-ownership reform in Northern Trust has adopted a method of increasing capital and expanding shares, increasing the amount of funds by not less than 7.7 billion yuan. It plans to introduce four social capitals as strategic investors, which will hold 15.56%, 15%, 15% and 12% equity in Northern Trust respectively.
After the completion of the mixed-ownership reform, the equity of TEDA Holdings, the current controlling shareholder of Northern Trust (holding 32.33% equity of Northern Trust), will be diluted to 15.25%. It will be reduced to the second largest shareholder, and must give up the right to recommend the chairman. After that, the shareholding of state-owned enterprise shareholders fell to 34%, the new social capital held 57.56%, and the other original shareholders held 8.44%.
It is understood that after the mixed-ownership reform, Northern Trust will increase its capital to 11 billion yuan. The company has also set a goal of “going out of the country and entering the top ten”. It plans to set up business departments in Hong Kong, Singapore, Hangzhou and Wuhan.
A related person of TEDA Holdings previously told the reporter that after the completion of the mixed-ownership reform, whether it is the proportion of private enterprises holding shares, or the proportion of private enterprises as a whole, it will be an absolute controlling position.
According to Cui Xuesong, manager of Asset Management Department of TEDA Holdings, “TEDA Holdings will give up the position of the largest shareholder of Northern Trust. In this regard, new major shareholders need to pay an additional amount of 1% of the total net assets of Northern Trust after the mixed-ownership reform.”
It is reported that CCI Holdings is the 26th large-scale private group ranked as the top 100 private enterprises in Shanghai. It has rich resources and investment operation experience in the fields of “industry operation, industrial investment, asset management”, which is line with the requirements of Northern Trust for the strategic investors with “leading management, rich resources and strong sustainable development”.
According to the reports, in the next stage, CCI Holdings will participate in the follow-up process of Northern Trust's capital increase and share expansion project according to the overall deployment and regulations about the mixed-ownership reform of the state-owned enterprises in Tianjin.
According to public information, Northern Trust, formerly known as Tianjin Economic and Technological Development Zone Trust and Investment Company, was established in October 1987 with the approval of the Tianjin Branch of the People's Bank of China. It is a state-owned non-bank financial institution supervised by the China Banking Regulatory Commission. Northern Trust is a state-owned holding company with a registered capital of 1 billion yuan. At present, there are 27 shareholders and 20 state-owned enterprise shareholders, with a total shareholding of 82.1%. Northern Trust is the first batch of the key pilot institutions in mixed-ownership reform in Tianjin.
Difficult transition period
It is reported that Northern Trust has proposed three requirements for the investors participating in this mixed-ownership reform. One is their good governance and leading management. Investors should have strong comprehensive strength, modernized and market-oriented management concept, high main business share and strong sustained profitability. Investors should belong to strategic investors rather than financial investors. The second is their strategic synergy and rich resources. Investors can introduce domestic first-class industrial capital, help the Company expand industrial investment field, optimize strategic layout, and introduce strategic investors with overseas financial service channels, experience and resources to promote the company's international development strategy. The third is their innovation model and sustainable development. Investors can achieve business model transformation and upgrading through the "Internet +". Investors should have strong capital operation capabilities to provide necessary financial support for enterprise development and to expand market share.
Bao Lijie, general manager of Northern Trust, publicly stated, “We have estimated the performance after the mixed–ownership reform. It is estimated that the net assets will reach 15 billion yuan, and the after-tax profit will be 3 billion yuan, which will enter the top ten in the industry.”
Unaudited financial data show that as of the end of 2017, Northern Trust had total assets of 298.98 billion yuan, self-operated assets of 4.78 billion yuan, and management trust assets of 294.2 billion yuan.
2017 is a tough year for Northern Trust. In May of last year, the Tianjin Banking Regulatory Bureau issued four penalties to Northern Trust, with a total fine of 800,000 yuan. The main reasons for the punishment were “the structural proportion of securities trusts exceeded the regulatory ceiling”, “unexecuted prior reporting system for related party transactions”, "Distribution of real estate loans in violation of regulations", and "executives performing their duties in advance without approval of qualifications."
Then, in June of last year, the Tianjin Municipal Commission for Discipline Inspection publicly charged seriously Wang Jiandong, chairman of Northern Trust, with his dereliction of duty and irresponsibility, and was relieved of his post of party secretary and chairman of the company.
Judging from information about the mixed-ownership, the current representative and chairman of Northern Trust are still in a state of absence, and Zhu Wenfang from TEDA Holdings, is on her behalf. The future chairman of Northern Trust is still waiting for the new major shareholders’ recommendation. If the mixed-ownership reform is successful, the new chairman of Northern Trust will be settled in the second half of this year.