Titanium Dioxide China Monthly Report 1701

Date: 2017-03

“Recommended article for China Titanium Dioxide Monthly Report 1702:
Henan Billions to facilitate employee stock ownership plan with USD175.04 million share buyback

On 7 Feb., 2017, the board of directors of Henan Billions Chemicals Co., Ltd. (Henan Billions) approved the Proposal on Repurchasing Company Stock (the Proposal). According to the Proposal, it will fund the repurchasing of no more than 4.92% of total shareholder equity at less than USD2.92 (RMB20) per share (the company’s current share price is USD1.89 (RMB12.94) per share), facilitating its employee stock ownership plan. What’s more, it revealed that it does not expect to repurchase more than 100 million shares and that the cost of the buyback should total no more than USD175.04 million (RMB1.20 billion).

“”This repurchasing of stock will not exert great pressure on the company’s finances or future development, considering the loose lines of credit it has with financial institutions and its sufficient funds””, stated a person responsible for the buyback at Henan Billions, “”Meanwhile, the implementation of the employee stock ownership plan is conducive to not only the company’s benefit sharing mechanism between employees and employers, but also to the integration of corporate cultures following the merger with Sichuan Lomon Titanium Industry Co., Ltd. (Sichuan Lomon).””

On 9 Jan., 2017, the company’s application to rename itself was reportedly approved by the State Administration for Industry & Commerce of the People’s Republic of China. Its official name is now “”Lomon Billions Co., Ltd””.

CCM is of the opinion that Henan Billions’s implementation of an employee stock ownership plan will not only strengthen company cohesion following its merger with Sichuan Lomon, but also aid it in advancing its new projects in 2017. Specifically,

1. Since Q4 2016, Henan Billions and Sichuan Lomon have consolidated their financial statements. What’s more, in Oct. 2016, Henan Billions hired experts to evaluate the two companies’ cultures and values. Later, in Dec., it adjusted its organisational and executive structures. In this context, the employee stock ownership plan has the potential to enhance company cohesion, and further, improve its competitiveness in the long term.

2. On 22 Jan., 2017, Henan Billions revealed that chloride process TiO2 projects will be the key focus of its future expansion. Currently, preparations for its 200,000 t/a chloride process TiO2 project are being made, and construction of the project may begin in H1 2017. By implementing an employee stock ownership plan, Henan Billions can stimulate the integration of management, operations and technology from both companies. Therefore, major projects in 2017 are expected to benefit from the implementation of this plan.”


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