Ganzhou Fengao to take control of ST Longda in $75M restructuring deal
What's the deal? Ganzhou Fengao Food will become the controlling shareholder of ST Longda (002726.SZ) through a US$68.8M (≈$75 million) buyout tied to the Chinese meat processor's court restructuring. Ganzhou Fengao plans to subscribe to 435.2 million transferred shares at US$0.16 each, while the "White Rabbit" group — via Shanghai Tuchi Zhida — plans to buy 150 million shares for US$23.7M, locked for 36 months.
Why now? ST Longda is under deepening pressure. It posted a US$38.4M net loss for the first three quarters, with revenue down 27.45% to US$760.4M year on year.
The strain is concentrated in the most recent quarter. The third-quarter net loss of US$25M widened 116.06% from a year earlier — nearly double the company's first-half loss and about 65.3% of the nine-month total.
What's the endgame? The restructuring aims to stabilise a cash-strapped business. Cash on hand fell 66.47% to US$18.7M by late September, against US$176M in short-term borrowings. Laiyang-based Longcheng Investment, a state-owned platform, had earlier forgiven about US$49.9M of debt.
The three investors agreed to pay roughly US$105.2M in share consideration, due within 15 working days of court approval. The Wanfeng consortium has already paid a US$15.2M performance deposit.
Who's behind the bid? Ganzhou Fengao is the vehicle designated by Wanfeng Food and Aonong Investment. The White Rabbit group — which previously joined Buban's restructuring and invested in Zhang Xiaoquan — is extending from retail and cutlery into meat products. Its participation does not amount to control: it may nominate one independent director post-restructuring.
What could go wrong? As of the latest disclosure, the court had not yet accepted the restructuring application, leaving the deal's completion uncertain. The company also faces mounting litigation: from July 14 to October 13, it logged 59 new lawsuits and arbitrations involving US$10.7M, and US$2.35M across bank accounts was frozen. Former controlling shareholder Lanrun Development continues to see its stake disposed of, falling to 12.99%.
The signal: Signing an investment agreement is not proof of recovery. As listed-company restructurings multiply in China, ST Longda shows the gap between finding a buyer and actually reviving operations — the real test is whether industrial integration and debt relief land before the losses do.
Read more: sohu.com
Image credit: Generated with Gemini
