Shin Kong Group The debt crisis has entered the second half. According to ST Shin Kong’s latest announcement,
received a notice from the company’s controlling shareholder Shin Kong Holdings Group Co., Ltd. (hereinafter referred to as “Xinguang Group”). "Jinhua Intermediate Court") applied for reorganization.
ST Shin Kong may change ownership
According to disclosures, as of the end of 2015, the end of 2016, the end of 2017 and the end of June 2018, the total liabilities of Shin Kong Group were 21.537 billion yuan, 39.955 billion yuan, 44.867 billion yuan, and 46.898 billion yuan respectively.
ST Xinguang announced that since the debt crisis of the company's controlling shareholder Xinguang Group in September 2018, Xinguang Group and its actual controllers have tried their best to formulate relevant plans and resolve debt risks through various channels, but they still cannot completely get rid of their liquidity crisis.
ST Xinguang stated that in order to protect the interests of creditors and properly resolve the debt problems of Xinguang Group and its subsidiaries, Xinguang Group and its wholly-owned subsidiaries Yiwu Xinguang Trading Co., Ltd., Shanghai Fuyue Mingcheng Holding Group Co., Ltd., Shanghai Based on the analysis of its own finances, asset status, debt situation, production and sales, industry prospects, industrial structure, etc., Xibao Industrial Co., Ltd. is an enterprise that can adapt to market needs and has restructuring value. Therefore, Xinguang Group and its three major subsidiaries The reorganization subsidiary applied to Jinhua Intermediate Court for reorganization on April 3, 2019.
In addition, Shanghai Fuyue Mingcheng Holding Group Co., Ltd. holds 77.78% of the equity of Xintian International Economic and Technical Cooperation (Group) Co., Ltd. (hereinafter referred to as "Xintian International"), because Xintian International cannot pay off the arrears owed to Shin Kong Group. Due to its current debt and lack of repayment ability, Xinguang Group has applied to Jinhua Intermediate Court for the reorganization of Xintian International.
ST Xinguang said that Xinguang Group and some of its subsidiaries have not yet received a formal acceptance ruling from the Jinhua Intermediate People’s Court for their proposed reorganization application, and there is still uncertainty as to whether it will enter the reorganization process. The company will continue to pay attention to the implementation progress, take corresponding measures based on the actual situation regarding the controlling shareholder's occupation of the company's funds and the company's illegal guarantees, and perform its information disclosure obligations in a timely manner.
As of the disclosure date of this announcement, Shin Kong Group holds 62.05% of ST Shin Kong's shares. If Shin Kong Group implements reorganization, it will not have a significant impact on ST Shin Kong's daily operations and may lead to a change in the actual control of ST Shin Kong.
Shin Kong Group was once very powerful.
According to reports, Shin Kong Holdings Group Co., Ltd. is involved in many industries such as jewelry, high-end manufacturing, real estate, Internet, finance, investment, etc., with total assets of approximately 80 billion yuan. Zhou Xiaoguang, the head of Xinguang Holdings, is quite well-known. He was born in 1962 and was the first private entrepreneur elected as a representative of the National People's Congress in Yiwu, Zhejiang.
In 2018, when many private companies encountered financial crises, Shin Kong Group also collapsed.
On September 25, 2018, Shin Kong Holdings Group announced that due to multiple factors such as macro-leverage reduction, contraction of bank credit, and financing difficulties for private enterprises, Shin Kong Holdings Group had liquidity problems, and 15 Shin Kong 01 corporate bonds should be issued on September 25. The resale principal of 1.7 billion yuan and the interest in the third interest payment year of 130 million yuan were paid. As of the date of this announcement, the company has failed to repay the repurchase principal and interest due on the bonds on time.
Soon, the rating agency United Ratings announced that it would lower the rating of Shin Kong Holdings Group from AA+ to CC, and adjust the rating outlook from stable to negative. Lianhe Ratings said Shin Kong Holdings Group is "currently very cash-strapped." United Ratings will continue to pay attention to the company's operations, financial status and implementation of debt repayment funds.
Before the debt crisis, the funds of listed companies were occupied by Shin Kong Group.
Now looking back at Shin Kong Group’s funding crisis, it is not without signs.
A Beijing News reporter combed through the issuance documents of Shin Kong Holdings Group and found that it has intensively sold off its assets since 2017.
In June 2017, Xintian Group, a subsidiary of Shin Kong Group, agreed to transfer 100% equity of Sanya Yalong Bay Seaview International Hotel for a transfer price of 1 billion yuan. In December 2017, Xinguang Yuancheng transferred 100% of its equity in Nantong 1912 Culture Company for a transfer fee of 1.05 billion yuan. In December 2017, Xinguang Yuancheng transferred 100% of its equity in Jiande Xinyue for a transfer fee of 1.245 billion yuan.
In May 2018, Shin Kong Yuancheng announced that it would transfer 46% of Shin Kong Yipin’s project interests for a transfer price of 1.824 billion yuan.
Xinguang Group stated that from June 2017 to June 2018, the company will receive a cash inflow of 5.119 billion yuan from the disposal of equity interests in various subsidiaries.
Xinguang Group has also launched external fund-raising.
At the end of August 2018, China Business News reported that amidst the exclamations of "incomprehension" in the industry, Shin Kong Holdings Group's 710 million yuan of short-term financing bonds were successfully issued in the interbank market at an interest rate of 7.5%. On August 31 Interest will be calculated from the date.
It is reported that Shin Kong Holdings, which has recently been involved in the Dagong rating controversy, has not issued any bonds for more than a year since it issued three short-term financings in 2017.
Shin Kong Group stated that a number of strategic financing plans will be implemented in the future, which will effectively guarantee the in-depth development and implementation of the group's multiple strategic business transformation plans in terms of funds.
Judging from the news that only emerged in the future, Shin Kong Group took non-compliant measures before the bond defaulted.
According to Xinguang Yuancheng’s announcement after Xinguang Group defaulted, the company provided guarantees for the controlling shareholder and its related parties’ financing of 300 million yuan without compliance. At the same time, the company’s controlling shareholder used external borrowings of 6.6 on May 4, 2018. billion (excluding interest) and was occupied by it.
In March this year, Shin Kong Yuancheng announced that the China Securities Regulatory Commission decided to launch an investigation into the company because the company failed to disclose external guarantees and funds occupied by major shareholders as required.
Shin Kong Group sells assets to save itself
However, even with the above-mentioned compliant and non-compliant means, Shin Kong Group still fell into default in September 2018.
In September 2018, after the default, Shin Kong Group publicly stated that the company had repaid the principal and interest of various debts of approximately 9 billion yuan as scheduled, resulting in a sharp increase in short-term payment pressure and insufficient liquidity as the biggest dilemma currently faced.
Shin Kong Group also stated that before the default occurred, Shin Kong Group urgently launched an emergency plan to seek solutions, including actively communicating with government departments and financial institutions, actively raising funds and disposing of assets.
is now reviewing what Shin Kong Group did after the crisis. Its asset sale plan once made progress, but strategic investors have not yet settled.
In September 2018, the Beijing News exclusively reported that Shin Kong Group was introducing external strategic investors to increase its capital by approximately 4 billion yuan; in addition, Shin Kong Group also planned to transfer its 77.78% stake in Xintian Group and expected to obtain cash The inflow was about 6.5 billion yuan.
industrial and commercial data show that at the end of September 2018, Shin Kong Group withdrew from the well-known investment institution Shanghai Baohu Investment Management Center (Limited Partnership) (referred to as Baohu Investment), which marked the first contraction of Shin Kong Holdings after the bond default.
According to a restructuring document of the listed company Yintai Resources at the end of 2017, Shanghai Baohu was established in August 2015. Since its establishment, it has been mainly engaged in investment management and asset management business. The executive partner is Shanghai Baopu Investment Management Co., Ltd. As of the end of 2016, its total assets and net assets were both approximately 1.9 billion yuan.
In October 2018, Shanghai Ruien Investment Co., Ltd. (referred to as Ruien Investment) had an equity change, and Shin Kong Holdings Group implemented its withdrawal. The only shareholders of Ruien Investment are Zhongbang Financial Holdings Investment Co., Ltd. and Shanghai Ruien Business Consulting Co., Ltd.
Previously, Ruien Investment played an important role in the financial layout of Shin Kong Holdings. According to reports, the company has formed strategic cooperative relationships with two local AMCs, Guangxi Guangtou and Shanghai Ruiyin Shengjia. The company’s products feature investment in non-performing assets, with investment management and wealth management as the entry point for business development, and the establishment of a third-party High-end comprehensive financial service platform.
However, as defaults continued to ferment, many creditors of Shin Kong Group chose litigation.
In October 2018, Shin Kong Group issued an announcement stating that the shares of Shin Kong Yuancheng held by Shin Kong Holdings Group Co., Ltd. and its controlling shareholder Yuyun Xin were judicially frozen and waiting for freezing. This time, 1134,239,907 shares were frozen by the judiciary, accounting for 1134,239,907 shares held by Shin Kong Holdings. 100% of Yuancheng shares, accounting for 62.0455% of the total shares of Shin Kong Yuancheng.
According to a report by the Beijing News in December 2018, the equity holdings of multiple financial companies held by Shin Kong Group have been frozen by the judiciary, involving Centennial Life, Nanyue Bank, Yiwu Shin Kong Small Loans Co., Ltd., and Hangzhou Shin Kong Financial Services Ltd. etc.
Regarding litigation issues, Xinguang Group stated that the company has received legal documents for cases involving asset preservation. On the one hand, it actively responds to the lawsuit, and on the other hand, it also strives to negotiate, reconcile and withdraw the lawsuit with the plaintiff.
Judging from public statements, Shin Kong Group is still seeking external support.
According to the latest announcement of Shin Kong Group on the Shanghai Clearing House, it has coordinated the resources of all parties and made every effort to formulate an overall plan to resolve the company's debt risks.
"Maintain close and regular communication with various regulatory authorities at all levels, and report relevant situations to various regulatory authorities in a timely manner through daily reports, weekly reports, meetings, etc.; actively maintain close contact and communication with the government and relevant departments, report in detail the company's relevant situations, and seek Government support." Shin Kong Group said.
Beijing News reporter Zhao Yibo intern Xie Bilu editor Wang Yu proofreader Lu Qian
Reporter contact information: [email protected]
