Economic Observer Network Reporter Zou Yongqin The Evergrande debt crisis that once subsided has made waves again.
On June 28, China Evergrande (0333.HK), which has been suspended from trading on the Hong Kong Stock Exchange for more than 63 months, announced that Top Shine Global Limited of Intershore Consult (Samoa) Limited will issue a notice to Hong Kong on June 24, 2022. The High Court of the Special Administrative Region filed a winding-up petition against the company, involving a financial obligation of HK$862.5 million. The petitioner was represented by Lian Haomin.
Public information shows that the so-called winding-up petition means that if a company has too many liabilities, its creditors and/or company members can file a winding-up petition with the court. After the winding-up petition is filed, the court will conduct a winding-up petition hearing. If the company is liquidated If the application is approved, the court will issue a compulsory liquidation order, ordering the company to sell its assets to repay debts, distribute remaining property, etc.
China Evergrande holds a "strongly opposed" attitude towards Lian Haomin's liquidation petition. In the announcement, China Evergrande stated that it does not expect that the petition will affect the company's restructuring plan or timetable; and emphasized that they have been actively communicating with creditors to promote overseas debt restructuring work, and are expected to announce overseas debts before the end of July. Initial plan for reorganization. "If the company is ultimately wound up as a result of this petition, any transfer of shares in the company made on or after June 24 without a sanctioning order from the High Court will be invalid."
According to the information disclosed on the Hong Kong High Court website, Lian Haomin’s petition to liquidate China Evergrande is case number HCCW220/2022. This petition will be heard at 9:30 on August 31, 2022.
Previously on June 20, China Evergrande issued an announcement stating that the company was actively promoting restructuring work and expected to announce a preliminary restructuring plan before the end of July. This news once caused the "Hengda Concept Stock" on the A-share market to rise to the limit.
communicates with data based on Datayes! According to statistics, there are currently 64 "Evergrande concept stocks" in the Shenzhen and Shanghai stock markets. Since China Evergrande's suspension of trading on March 18, they have gone out of the rising market due to the prospect of debt restructuring, and their total market value has also increased from 3 It rose from 578.2 billion yuan on June 18 to 798.4 billion yuan on June 28, an increase of 220.2 billion yuan.
Since the news came out last week that "Evergrande will announce a preliminary restructuring plan before the end of July", the trend of this sector has been extremely active. Among them, those located in Shenzhen City have experienced a decline in 2021 performance due to Evergrande's debt crisis. Guangtian Group (002482.SZ), Bauing Group (002047.SZ), Ruihe Group (002620.SZ), etc., which suffered significant losses, have successively experienced daily limit increases. Among them, Ruihe shares took the lead in raising the limit on June 20, followed by Grandland Group on June 21, Jinlongyu (002882.SZ) on June 22, and Bauing shares even reached the daily limit on June 21 and The daily limit appeared on June 24.
However, just eight days later, things took a turn for the worse. So, how do the listed companies that are most active among these "Evergrande Concept Stocks" view the emergence of the Evergrande liquidation crisis? To this end, on June 28, reporters from the Economic Observer Network called relevant companies as investors to conduct interviews and consultations one by one.
"We have also noticed this news. According to Evergrande's announcement, it will still have to go through legal procedures." Relevant staff from Bauing Securities Department told reporters that the company had previously started a series of investigations on Evergrande's claims. "Now we don't have much Evergrande debt left on hand (about 300 million yuan), so it can be said that this has not had a big impact on the company." Even if there is an extreme situation where Evergrande is really liquidated, it will definitely have some remaining assets to return to creditors or shareholders. In other words, the company will more or less be able to get some back, it just means more or less. It’s just a problem.” After checking the relevant announcements,
reporters found that Bauing Shares had previously transferred its Evergrande debt of approximately 450 million yuan to Hangcheng Land at the same value, and mortgaged Evergrande’s debt with a book value of approximately 2.386 billion yuan. The valuation of Zhuhai Jianying increased to 1.193 billion yuan, thus reducing Evergrande’s debt to about 369 million yuan.
As for why the debt of Evergrande, which increased Zhuhai Jianying's capital, was greatly discounted, the above-mentioned staff member said, "We have an evaluation report and a document from an intermediary agency. It is not a price that is set casually. There is a basis to follow."
Among these 64 "Evergrande concept stocks", Grandland Group should be considered the most typical one. Not only did the company suffer losses of up to 3.64 yuan per share in 2021 due to Evergrande's debt, it also caused overdue bank debt of up to 1.8 billion yuan, and was filed for bankruptcy reorganization by a supplier on May 30.
So, if Evergrande is really liquidated, what impact will it have on them? In this regard, relevant staff of Grandland Group told reporters that there is no way to predict for the time being, because it depends on how many assets the other party has and how it will repay creditors. "Although Evergrande is not operating well now, it is still If there is a lot of assets, if it is really liquidated, accounting firms and other institutions will conduct an inventory of its assets, and then make a proportion of the repayment to our creditors. Specifically, this situation is still in its early stages, and we are not sure. It’s not clear what proportion it will pay back to us in the future.” Faced with the same problem as
, Ruihe Co., Ltd. said that liquidation is relatively complicated because it involves all aspects. “It depends on the specific situation and plan at that time, so we still don’t know what impact it will have on the company.”
Ruihe shares further stated that the company has made provision for bad debts of 1.8 billion yuan owed by Evergrande. "Since this year, although the company still has a small amount of business dealings with Evergrande, this is the most important thing." It’s the government’s affordable housing, and the like, which must be completed.” Relevant staff of
Jin Longyu pointed out to reporters that the company’s Evergrande receivables are about 300 million yuan, about 80% of which have been made provision. “In the 2021 annual report, we have Evergrande's receivables have been provisioned for bad debts, which is why our net profit dropped significantly last year. Since Evergrande became overdue, all business we have with Evergrande has been covered by the company. Cash is required and no receivables will be incurred. Precisely because the company has made a series of relevant preparations, if the worst happens (Evergrande is liquidated), it will still have an impact on our company. But the impact has been reduced to a minimum."
