On June 27, Zhuhai Gree Electric Co., Ltd. (Gree Electric, 000651) issued an announcement stating that the company intends to review and approve the “Regarding the Repurchase of Part of the Public”, which was reviewed and approved at the 16th meeting of the 11th Board of Directors on October 13, 2020. The “Proposal on the Share Plan” (hereinafter referred to as the “Second Repurchase”) corresponding to the use of repurchased shares was adjusted, from the original plan that “repurchase shares will be used for employee stock ownership plans or equity incentives” was changed to “repurchase shares”. Cancellation in order to reduce the registered capital”.
Gree Electric introduced that the company’s second phase of repurchased shares totaled 101,261,838 shares. After this change and cancellation, the company’s total share capital will be changed from 6,015,730,878 shares to 5,914,469,040 shares. The board of directors of the company requested the general meeting of shareholders to authorize the company’s management to handle the relevant procedures for the cancellation of the above-mentioned shares. This proposal still needs to be submitted to the general meeting of shareholders for deliberation.
Gree Electric stated that this change in the second phase of repurchase shares and cancellation is a decision made by the company based on the current actual situation, which is conducive to further improving the level of earnings per share. Effectively increasing the return on investment of the company’s shareholders will not have a significant impact on the company’s financial status and operating results, and there will be no circumstances that will harm the company’s interests and the rights of small and medium investors.
In 2020, Gree Electric launched two equity repurchase plans. Among them, 1.80% of the shares were repurchased in the first phase, and 1.68% of the shares were repurchased in the second phase, for a total of 3.48%. On May 26 this year, Gree Electric once again offered a repurchase plan of no more than RMB 15 billion. Gree Electric stated that the repurchase was used to implement the company’s employee stock ownership plan or equity incentives to further improve the corporate governance structure.
But on June 20th, Gree Electric’s draft employee stock ownership plan was controversial.
The draft shows that the capital scale of Gree Electric’s employee stock ownership plan does not exceed 3 billion yuan, and the stock scale does not exceed 108.4 million shares. The total number of employees who intend to participate in this employee stock ownership plan does not exceed 12,000, and the employee purchases the stock at a price of 27.68 yuan per share, which is equivalent to 50% of the average price of the shares repurchased by Gree Electric.