Original title: Detailed explanation of China Fortune’s debt restructuring plan: Repayment of 219.2 billion yuan in financial debt or bid farewell to commercial real estate
21st Century Business Herald reporter Kong Haili reports from Beijing
Eight months after the liquidity crisis, China Fortune Land Development announced its preliminary debt restructuring plan on September 30, which includes two parts: a settlement plan and a business continuity plan. The company’s shares will resume trading from the opening of the market on October 8.
The announcement shows that China Fortune Land Development plans to repay 219.2 billion yuan of financial debts through the following methods:About 75 billion yuan of funds returned from the sale of assets, of which about 57 billion yuan was used to redeem financial debts; about 50 billion yuan of financial debts were taken away from the sale of assets; about 35.2 billion yuan of priority financial debts were extended or settled; holding properties, etc. The trust beneficiary share of about 22 billion assets set up to offset related financial debts; the remaining financial debts of about 55 billion yuan will be taken over by the company, extended, reduced interest rates, and gradually paid off through subsequent business development.
In terms of business, after asset and business reorganization,Will retain the Peacock City residential business, part of the industrial new city business, property management business and other businesses.
After five trading days of trading suspension and communication with creditors, this debt restructuring plan still needs to be further confirmed with related parties in the future, and there is still the possibility of adjustment.
“But the big framework has been agreed with creditors under the guidance of the government, which is a good thing for all parties.” The relevant person familiar with the matter said to the 21st Century Business Herald reporter.
Analyzing this debt restructuring plan, it can be found that China Fortune Land Development’s commercial real estate business may eventually bid farewell and go round and round. China Fortune Land Development finally returned and adhered to Wang Wenxue’s ideal of “being a new industrial city with sincerity and sincerity”.
“Don’t evade debts”
The debt restructuring plan covers a total of 219.2 billion yuan in financial debts, based on the basic premise of “no evasion of debts”, and in accordance with the principles of marketization, rule of law, fairness and justice, and categorized policy implementation, to steadily resolve the debt risks of China Fortune.
In terms of asset sales, China Fortune Land Development continued its consistent agility. The announcement shows that the company will actively seek out potential investors with strong financial strength and good synergies to sell assets with strong liquidity capabilities. The returned funds are mainly used to repay financial debts.
It is reported that China Fortune Land Development’s saleable assets are expected to be able to return about 75 billion yuan of funds, of which about 57 billion yuan is planned to be used to pay financial debts in cash; the remaining part will be used to implement residential development and delivery responsibilities, and to restore industrial new towns and other business sectors. The normal operation of the company to guarantee the repayment of operating debts and undertake financial debts.
The second measure focuses on “selling assets to take away financial debts of approximately 50 billion yuan.” China Fortune Land Development plans to sell the project company’s own financial debts, and take them away with the project company’s equity sales and transfer them out of the company. The company agreed to repay the principal and interest in accordance with the debt restructuring agreement. The project company for sale can conditionally accept the corresponding financial debts that are repaid by the company through debt replacement. The debt after replacement will be extended and interest rates will be reduced. The specific replacement method will be negotiated by the company, the purchaser of the saleable project company, and relevant financial creditors. .
In addition to the above-mentioned sales measures, China Fortune Land Development will also resolve approximately 35.2 billion yuan in financial debts through the extension or settlement of priority financial debts. Among them, the financial debts pledged by accounts receivable and physical assets are extended to retain debts, the original property guarantee measures are maintained, and the interest rate is lowered during the extension; if the collateral related to the physical asset mortgage is disposed or sold, the secured creditor’s rights can be guaranteed Priority repayment within the scope of property disposal or sale price; if the account receivable is pledged, it shall be repaid in proportion to the annual installment; the development loan related to real estate development and construction and other businesses shall be maintained by the relevant financial institution as the balance of the development loan, the interest rate will be reduced, and the stock Projects are gradually sold and repaid, and new projects are gradually launched.
In addition, China Fortune Land Development will also set up a trust plan with the company’s approximately 22 billion yuan holding properties with stable cash flow and other assets, and repay related financial debts with the trust beneficiary share.
In the end, the remaining financial debts of about 55 billion yuan will be undertaken by the company, extended, reduced interest rates, and gradually paid off through subsequent business development. After the expiration of the renewal period, according to the follow-up business situation of the enterprise, the repayment can be negotiated directly or the renewal period can be continued.
China Fortune Land Development Corporation disclosed in the announcement that due to business difficulties, the financial debt under this debt restructuring plan has been subject to unpaid interest exemption or interest payment. If you choose to use interest payment, the interest rate will be lowered; The penalty interest, liquidated damages, compound interest and other liabilities for breach of contract shall be exempted.
Return to main business
In addition to the financial debts weighing on the head, it is more important to restore the long-term “hematopoiesis” function.
China Fortune Land Development disclosed in the announcement that the company will retain the Peacock City residential business, part of the industrial new city business, property management business and other businesses after the reorganization of assets and business.
Among them, the residential business section of Peacock City will take multiple measures to relieve capital pressure, operate in an orderly manner, and explore diversified means such as rolling land development to better complete real estate development and delivery tasks.
It is worth noting that the commercial real estate business that was once placed high hopes by China Fortune Land and occupied half of the company’s assets did not appear in China Fortune Land Development’s announcement. Perhaps this time it is really going to bid farewell to the spin-off of its southern headquarters. , May also be a high probability event.
Bringing the time back to the beginning of 2019, the second shareholding of China Fortune Ping An, transported the commercial sector and new business team-former China Resources Land executive director Wu Xiangdong brought a team of 100 people to China Fortune Land and became the co-chairman and CEO. For this reason, China Fortune Land Development Corporation established its Southern Headquarters in Shenzhen, which was solely responsible by Wu Xiangdong. The main business of the Southern Headquarters focuses on commercial real estate and urban renewal.
According to incomplete statistics from 21st Century Business Herald reporters, China Fortune Land Development has acquired nearly 35 billion yuan in land in the commercial real estate sector. From April to June 2020, the Southern Headquarters led by Wu Xiangdong successively obtained Nanjing Jinling China Center Project, China Merchants Bank Global Headquarters Building Agent Construction Service, Wuhan Zhongbei Road Project, Harbin Shenha Financial Technology City Project, Guangzhou Baietan Project, etc.
After the liquidity crisis of China Fortune Land Development, the urban renewal business of the Southern Headquarters was transferred to Peng Rui Real Estate in June. The latter played the role of handing out the olive branch to China Fortune Land Development South Headquarters and Wu Xiangdong himself in market news, but the Southern Headquarters The news of the divestiture and Wu Xiangdong’s departure has not been officially confirmed.
In the first half of the year, China Fortune Land Development also made efforts in commercial real estate. Wuhan Yangtze River Center, Nanjing Daxiaochang, Guangzhou Baietan, Harbin Financial Technology City, and China Merchants Bank Global Headquarters all made progress to varying degrees.
According to a person familiar with the business of China Fortune Land Development, in the implementation of the debt restructuring plan, there is a high probability that the assets and debts of the Southern Headquarters will be clarified simultaneously.
The new industrial city, as the moat business of China Fortune Land Development, will continue to play a role in the future, but it will pay more attention to the selection of the best.
According to the reporter of 21st Century Business Herald, the projects and residences in many places under the China Fortune Industrial New City sector have maintained normal operation under the liquidity dilemma. Langfang, Gu’an, Bazhou, Yongqing, Dachang, Huailai, Peacock cities in Wuhan, Hefei, Nanjing and other places are also on sale.
China Fortune Land Development said in the announcement that “the problem of over-concentration of business layout in the future industrial new city will be significantly improved, and the ability to withstand regional policies and market risks will be significantly improved.” With support, it will gradually improve its operating conditions and restore its “hematopoietic” capabilities.
(Author: Kong Haili Editor: Zhang Weixian)
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