in p>2118, the two sides decided to cooperate, and the valuation of South Beauty was about 2 billion yuan. CDH invested 211 million yuan in South Beauty, accounting for 11.53% of the shares of South Beauty, which was a good start.
But Zhang Lan may not have read the contract carefully, thinking that investment means that the enterprise will give me the money, and the money will be used by me. Many entrepreneurs have this kind of thinking, and this kind of thinking can cut off the leek of capital, but when you meet a professional investment institution, then you are a leek, so how can the money of a professional investment institution be so easy to get?
There is a gambling agreement in it. Specifically, there are three clauses, and the funds are interlocked:
The first clause, the share repurchase clause: If South Beauty cannot be listed at the end of 2112 or the actual controller of South Beauty changes due to reasons other than CDH, CDH has the right to quit South Beauty.
Comment: In fact, this gambling is aimed at listing, and the purpose is very clear. Even if the founder wants to sell the company halfway, there is no chance. If the listing is not completed within the specified time, CDH will quit. How to quit? The next clause is how to quit.
clause 2: if CDH agrees to sell or liquidate the company, Zhang Lan shall agree to the transaction and sell its shares at the same price and conditions.
Comment: This condition is very harsh. Once the listing fails, Zhang Lan will lose the initiative, because if the other party decides to sell shares, you and Zhang Lan have to agree. Not only that, you have to sell shares at the same price. Because we know that if only investors want to sell shares, it may not be so easy to sell, because the other party can't get control of the company, and you can't go public, so it is of little significance to buy shares. However, once the founder also sells the shares together, then he can gain control, and the intention of the acquirer will increase greatly. This is a clause drawn up by CDH from its own perspective. Do you think this is the end? That can only say that you don't know professional investment institutions, and every penny is to get a return!
clause 3, liquidation priority clause: CDH and Zhang Lan sell their shares together, and the money received from the sale of shares should give priority to ensuring that CDH will get twice the return.
This condition is harsh, which is to prevent the company's valuation from changing at that time and prevent the money from selling shares from being insufficient for the return on investment. Therefore, it is necessary to let Zhang Lan, the major shareholder, sell shares together to ensure the return of investors first.
In this way, if the listing fails, then Zhang Lan will fail, and it is inevitable to lose South Beauty.
4. How did South Beauty lose the bet?
maybe Zhang Lan didn't read the contract carefully, or maybe he was too confident and didn't fully consider the risks involved.
will it take more than four years to complete the listing? If this problem is listed at the right time, it is not difficult, but it depends on policies and changes in the overall environment. There are many catering enterprises listed, which has precedents, but South Beauty has not caught up with the good time.
South Beauty has gradually become a first-line high-end catering brand, but consumers are also related to eating and drinking with public funds. With the "strike hard" on eating and drinking with public funds, these catering enterprises have been greatly affected, especially after the promulgation of the "eight regulations", not only South Beauty failed to go public, but CVC acquired 82.7% of the shares of South Beauty at the cost of $311 million (CVC was also a leveraged buyout at that time, with its own funds of $61 million and a bank loan of 1.
In March p>2115, CVC applied to the Hong Kong court to freeze the assets of Zhang Lan and South Beauty. Since then, Zhang Lan has been out.