[NTD News November 26, 2021, Beijing time]Fantasia Holdings Group, founded by the core member of Jiang Zemin Group’s niece Zeng Qinghong, is in danger again. Its subsidiary Hong Kong Fantasia has been filed for a winding-up petition, which shows that Fantasia’s debt problems are increasing. serious.
On the evening of November 25, Fantasia Holdings Group issued an announcement that its subsidiary, Hong Kong Fantasia Investment Holdings Group Co., Ltd., was applied for a winding-up petition on the 24th. The company is the guarantor of a $149 million loan facility with outstanding principal.
Winding-up refers to a process in which all the company’s assets are sold for cash to pay off debts, and ultimately the company is terminated.
Fantasia stated that the company will take all necessary measures to resolve the matter, including constructive dialogue with the petitioner.
Fantasia was founded in 1996 by Zeng Jie (also known as Zeng Baobao), the niece of Zeng Qinghong, the former vice chairman of the Chinese Communist Party and a core member of the Jiang faction, and was listed in Hong Kong in 2009.
In the context of the Xi Jinping authorities’ tightening of real estate financing, in October this year, Fantasia fell into a debt whirlpool, and a debt of US$205 million was due but was unable to repay it. The company’s credit rating was simultaneously reduced to negative by Fitch, Moody’s, and Standard & Poor’s three international credit rating agencies, reflecting the extremely high risk of default.
In addition, according to a report released by the credit rating agency “China Chengxin International” on November 23, as of that day, Fantasia had a total of RMB 6.447 billion in outstanding credit bonds, of which a bond of 730 million yuan will mature on November 29, and another A 949 million yuan bond will mature on December 17. However, Fantasia has not yet promised to pay the principal and interest of the aforementioned bonds.
The report pointed out that since October this year, the amount of contracted sales in Fantasia has fallen sharply, financing has also faced great obstacles, asset disposal has not made substantial progress, and the risk of bond default has increased.
Two directors suddenly resigned in Fantasia
As the debt crisis intensified, Fantasia Holdings announced on the evening of October 11 that Ho Man and Priscilla Wong, independent non-executive directors of the company, had resigned.
According to the Hong Kong listing rules, after the resignation of these two directors, Fantasia Holdings has no longer met the listing requirements. Any company listed in Hong Kong must have at least three directors.
In response, Fantasia Holdings stated that the company is looking for suitable replacement candidates. However, people in the industry believe that it will be quite difficult to find new directors at this time in the Fantasia with huge debts.
In addition, Fantasia and its subsidiaries have been suspended in Hong Kong at the end of September, on the grounds that the company is facing an asset sale transaction. Mike Leung, investment manager of Wocom Securities Ltd., said bluntly, “The resignation of the director will make it difficult for Fantasia to resume trading.”
Since the beginning of the year, Fantasia has plunged 75.6% in the Hong Kong stock market, becoming a “junk stock”, that is, stocks whose stock price has fallen below 1 Hong Kong dollar.
Fantasia layoffs
On October 30, Fantasia broke the news of internal layoffs. Lu Media’s “Financial World” weekly published a recording of an internal meeting held in the Southwest of the Fantasia on October 27.
In the recording, the person in charge of human resources in the southwest region of the company revealed that due to capital supervision, the company’s cash inflows have been “completely cut off” and “the situation is far more serious than what everyone has heard and guessed.”
The person in charge also revealed that the major regions of the Fantasia Group have begun to “slim down” one after another, and that the Southwest Company will be launched at the latest, and employees will decide to stay or leave on October 30.
Zeng Baobao admits to facing the “darkest moment”
After the Fantasia debt exploded, the company’s founder Zeng Baobao once publicly admitted that he was facing the “darkest moment”, but still claimed to be able to tide over the difficulties. However, judging from the current situation, the situation in Fantasia seems to be getting more and more difficult.
Tang Jingyuan, a current affairs commentator in the United States, once told NTD that the difficulty of borrowing and financing currently encountered by Fantasia is closely related to Xi Jinping’s current reorganization of real estate companies. “Baby Zeng can’t borrow money from the mainland bank.”
Chen Youcheng, a Chinese financial scholar, told Radio Free Asia that Zeng Baobao is not so good now because her backer has become the target of being attacked in the political power struggle. On the contrary, a real estate company that is not regarded as a hostile force by those in power can “escape.”
(Reporter Luo Tingting Comprehensive Report / Chief Editor: Wen Hui)
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