Viewpoint Following the sale of the equity of the residential project in Singapore, Fantasia, eager to return to blood, once again put the Shaoxing project on the shelf.
On May 19, Fantasia Holdings Group Co., Ltd. announced that CCCC Meilu (Hangzhou) Real Estate Co., Ltd., a wholly-owned subsidiary of CCCC Real Estate, and Shaoxing Huamei Real Estate Development Co., Ltd. and Shenzhen Lianya Consulting Co., Ltd. under Fantasia The company signed the Equity Acquisition Agreement.
It is reported that the target company of this transaction is China Jiaotong Huachuang (Shaoxing) Real Estate Co., Ltd. At present, CCCC Meilu holds 49% of its shares; Fantasia holds 49% of its shares, and Shenzhen Lianya, controlled by natural persons Hu Jing and Zhou Shaolei, holds 2% of its shares.
According to the announcement, CCCC Real Estate plans to acquire a 51% stake in CCCC Huachuang from Fantasia and Shenzhen Lianya.
The purchase price is about 408 million yuan. At the same time, CCCC Real Estate transferred the debts of Fantasia and Shenzhen Lianya to CCCC Huachuang in an equal amount of about 283 million yuan in principal and 70 million yuan in interest.
To sum up, the total consideration of the transaction is about 761 million yuan. After the transaction, Fantasia will officially withdraw from CCCC Huachuang, and the project company will be wholly-owned by CCCC Real Estate.
According to the data, CCCC Huachuang is currently developing and constructing the project plot of No. 4 Jinghu Guandu in Yuecheng District, Shaoxing City. The project case is called “Spring Breeze Ten Miles”. The project was originally won by China Communications and Fantasia for 4.156 billion yuan on April 30, 2020, covering an area of about 197,200 square meters, including a river channel of no less than 8,847 square meters.
Since the beginning of this year, in order to reduce the risk of cooperative projects, it is not uncommon for real estate companies to acquire equity from the risk-seeking party. However, it is worth noting that CCCC Real Estate, the takeover party in this transaction, is also in the center of public opinion recently.
Previously, a document titled “Report on Unable to Repay Financial Institutions Due to Loans Due in May 2022” was circulated on the Internet, and the signed issuer was suspected to be Li Yongqian, chairman of CCCC Real Estate. The document mainly explained the company’s main financial borrowings and funds to the major shareholder, CCCC Real Estate Group Co., Ltd., expressing the meaning of the inability to repay the debt due to the concentrated release of pressure in May.
On May 11, CCCC Real Estate held a performance briefing. At the meeting, Tian Yuli, secretary of CCCC Real Estate, responded that the above rumors are inconsistent with the facts, the company’s cash flow is normal, the financing channels are smooth, and it can guarantee the repayment of due debts.
He pointed out that the company has been actively exploring a variety of financing channels under the condition of continuous real estate policy regulation. “As the controlling shareholder, CCCC Real Estate Group has provided useful support for our company’s financing work by providing guarantees for our company’s financing and providing loans to our company.”
In response to this acquisition, some market participants believe that this aspect shows that CCCC Real Estate is optimistic about the follow-up sales prospects of the Chunfeng Shili project, and at the same time, it can also confirm that CCCC Real Estate’s current cash flow situation is acceptable.
According to Viewpoint New Media, the Spring Breeze Ten Miles project has maintained a high level of attention since the land was acquired, and is regarded by the market as the “last piece of the puzzle of a luxury street” on Guandu Road, Jinghu, Shaoxing.
Since the opening of the project, the data has been quite good, and the products of stacked villas and townhouses even have a rhythm of fire. Up to now, there are a total of 1,156 houses available for sale in the Spring Breeze Shili Project, of which 528 houses have been sold, accounting for nearly half of the total.
As the transferor of this transaction, although Fantasia stated in the announcement that it “expects the group to record a loss of approximately RMB 96.8 million”, it also pointed out that the sale is one of the measures the company is implementing to alleviate its liquidity problems. First, the proceeds will be used as daily working capital and used to ensure the delivery of buildings, people’s livelihood and stability.
It is reported that since the liquidity crisis occurred in October 2021, Fantasia has successively sold several project companies in Chengdu, Ningbo, Chongqing, Beijing, Guangzhou and Singapore to recover cash flow.
Among them, the entire equity of the project company of “Fantasia·Wanghuaxi” in Chengdu was transferred to Zhongrong International Trust Co., Ltd.; the equity of the two projects of Guoxiangfu and Guoxiang Yunshu located in Miyun District, Beijing were sold to the project partner Xuhui Group; The Ningbo Mingcuidongzhu project was transferred to Jian’an Investment Holding Group Co., Ltd.; the interest in the Parkwood Collection project company, a residential development project in Singapore, was sold…
It is not known whether these sales actions are related to the entry of “White Knight”, but some analysts believe that Guangdong Mintou Alternative will usher in a new dawn for Fantasia’s debt haze.
On April 11 this year, Fantasia announced that it signed a restructuring and investment advisory service agreement with Guangdong Mintou Alternative Private Equity Fund Management, and hired it as a restructuring and investment advisor, and as a potential strategic investor in Fantasia’s debt restructuring to assist in the implementation of the plan.
According to the announcement, Guangdong Mintou Alternative will provide assistance to Fantasia and Cai Life in various aspects, including debt restructuring and asset sales.
It is reported that Guangdong Mintou Alternative is a domestic enterprise focusing on equity investment, non-performing asset investment, asset management and industrial resource integration. It was established in November 2020, and the largest shareholder is Guangdong Mintou holding 40% of the shares, while Guangdong Mintou is guided and promoted by the Guangdong Provincial Government. There are 16 companies in Guangdong Province, including Country Garden, Midea Holdings, Galaxy, and Haitian Group. The private enterprise was launched in September 2016 with a registered capital of 50 billion yuan and an initial paid-in capital of 16 billion yuan.
Some analysts said that this move is a relatively positive signal for Fantasia. With the assistance of Guangdong Mintou Alternative, Fantasia’s debt restructuring is expected to accelerate.
Up to now, although there is no new news about the alternative cooperation between Fantasia and Guangdong Mintou. However, in terms of resumption of work, good news has been reported in Fantasia.
Taking the Fantasia Hangzhou Duyuetian project as an example, the new general contractor Zhejiang Baoye Construction Group Co., Ltd. has been replaced on April 26, 2022, and the resumption of work has been fully started. Previously, the project has been suspended for more than 3 months.
According to Fantasia, in April 2022, 38 of the 49 project bids that should be resumed in Fantasia have resumed work, with an overall return rate of 80%. The remaining bids currently have a clear resumption plan and corresponding resumption measures. All are expected to resume work by June 30.