ZYBANK (01216) has announced that its non-wholly-owned subsidiaries, Bangyin Financial Leasing and Luoyin Financial Leasing, formally signed a restructuring agreement. Under the terms of this agreement, Bangyin Financial Leasing will serve as the surviving entity and absorb Luoyin Financial Leasing through a merger, with consideration shares to be issued to all shareholders of Luoyin Financial Leasing listed on the register at the record date. The issue price for these consideration shares has been set at approximately RMB 2.28 per share, while the conversion price for Luoyin Financial Leasing shares stands at approximately RMB 1.89 per share.
As part of this transaction, ZYBANK holds a 90% equity interest in Bangyin Financial Leasing, which is recognized as a non-wholly-owned subsidiary of the bank. Similarly, Luoyin Financial Leasing is also a non-wholly-owned subsidiary, with ZYBANK maintaining a 66.875% stake, which includes a 9.375% transfer from Shenzhen Zhaocheng that remains subject to regulatory approval from the competent authorities.
To complete the exchange for all outstanding shares of Luoyin Financial Leasing, Bangyin Financial Leasing will issue a total of 1.654 billion new shares. Upon completion of this restructuring, the total share count of Bangyin Financial Leasing will rise from 3 billion to 4.654 billion shares. Consequently, the registered capital of Bangyin Financial Leasing will increase from RMB 3 billion to RMB 4.654 billion, with the final amount subject to approval by regulatory authorities.
Where this restructuring fits
According to Article 112 of the Implementation Measures for Administrative Licensing of Non-Banking Financial Institutions, in principle, the same investor, along with its controlling shareholders, actual controllers, controlled subsidiaries, parties acting in concert, and other enterprises controlled or jointly controlled by the actual controller, may not serve as major shareholders in more than two non-banking financial institutions. Furthermore, such parties may not hold controlling equity in more than one non-banking financial institution of the same category, nor hold minority equity in more than two non-banking financial institutions of the same category.
Prior to May 2022, ZYBANK held a controlling interest in Bangyin Financial Leasing. In May 2022, the bank completed an absorption merger with Luoyang Bank Co., Ltd., subsequently inheriting the controlling interest in Luoyin Financial Leasing that was previously held by Luoyang Bank. As a result, as of the announcement date, ZYBANK holds controlling interests in both Bangyin Financial Leasing and Luoyin Financial Leasing, which are classified as non-banking financial institutions of the same category.
Purpose and expected outcomes of the deal
The primary objective of this restructuring is to resolve the issue of ZYBANK simultaneously holding controlling interests in two non-banking financial institutions of the same category. The reorganization is designed to lay a solid foundation for the long-term stable development of the group, while also strengthening its capital position and market competitiveness.
The restructuring will enable the integration of the product systems of both Bangyin Financial Leasing and Luoyin Financial Leasing, allowing for the launch of a more diverse range of financial leasing products. This expanded product offering is expected to meet the differentiated needs of various customer segments and achieve business synergies across the group. Additionally, the reorganization will optimize the asset quality of Bangyin Financial Leasing, enhancing its resilience against potential risks.
This restructuring represents a significant step in ZYBANK's strategy to build a comprehensive and diversified financial services system. Following the completion of the merger, Bangyin Financial Leasing will serve as an important platform for the bank to support the real economy, which is expected to enhance the bank's overall financial service capabilities and strengthen its market position.