On the evening of July 9, Ziguang Group announced that it had received a "Notice" from the Beijing No. 1 Intermediate People's Court on the same day. The relevant creditors stated that the group was unable to pay off its due debts, and its assets were insufficient to pay off all

Every reporter: Li Shaoting Liu Chunshan Every editor: Wenduo

html On the evening of July 9, Ziguang Group announced that it received a "Notice" from the Beijing No. 1 Intermediate People's Court on the same day, and the relevant creditors The group was unable to pay off its due debts, its assets were insufficient to pay off all debts and it clearly lacked solvency. It applied to the court for bankruptcy reorganization of Ziguang Group on the grounds that it had reorganization value and feasibility.

"Our group will fully cooperate with the court in judicial review in accordance with the law, actively promote debt risk resolution, and support the court in safeguarding the legitimate rights and interests of creditors in accordance with the law." Ziguang Group said in the announcement.

The National Enterprise Bankruptcy and Reorganization Case Information Network shows that it was Huishang Bank that applied to the court for the bankruptcy and reorganization of Ziguang Group. As a Hong Kong stock listed company, it is the fifth city commercial bank in the country with assets exceeding one trillion yuan.

Zhou Bing, a professional engaged in bankruptcy work and general manager of Sichuan Haocheng Enterprise Liquidation Firm, told " Daily Economic News " that based on the current information, the court only received the creditor's application for the reorganization of Ziguang Group. When reviewing whether to decide whether to accept the case, the notice issued by Ziguang Group will be investigated. Xu Feng, director and chief partner of Shanghai Jiucheng Law Firm, also believes that the court’s bankruptcy and reorganization application for Tsinghua Unigroup is still in the review stage and is not the start of reorganization.

The current default of principal and interest is nearly 7 billion yuan

html At around 4 pm on July 9, the National Enterprise Bankruptcy and Reorganization Case Information Network disclosed the (2021) Beijing 01 Poshen No. 307 case, Huishang Bank applied to the court for bankruptcy of Ziguang Group After reorganization, the handling court is Beijing No. 1 Intermediate People's Court. However, as of press time, Huishang Bank has not responded to this.

Image source: Web page screenshot

In March this year, China Chengxin International downgraded the main rating of Ziguang Group to C. According to Wind data, the company has issued a total of 8 bonds since 2016. According to information publicly disclosed by Ziguang Group on June 30, six of its bonds have defaulted, namely 16 Ziguang 01, 16 Ziguang 02, 17 Ziguang 03, 18 Ziguang 04, 19 Ziguang 01, and 19 Ziguang 02. At that time, Ziguang Group stated that the company had started debt risk resolution work and would actively communicate with holders to formulate debt solutions.

Picture source: Announcement screenshot

The debt crisis began to emerge in November last year. On November 2, 2020, Ziguang Group's related bonds "19 Ziguang 01" and other bonds experienced abnormal fluctuations, and was suspended from trading in during the session, followed by multiple intraday trading suspensions. On November 16 last year, "17 Ziguang Group PPN005" failed to reach an extension agreement with investors and was the first bond of Ziguang Group to default. CCXI once reminded that although the company’s domestic public existing bonds do not have cross-default clauses, the default of “17 Ziguang Group PPN005” may trigger cross-defaults on some other interest-bearing debts.

From mid-November to mid-December last year, China Chengxin International downgraded Ziguang Group’s credit rating three times, from AAA to B. Due to tight liquidity, Ziguang Group was unable to raise funds for repayment when due (November 16, 2020), and the debt issued with a total amount of 1.3 billion yuan could not be repaid in full on time.

In March this year, Citigroup International Co., Ltd. (the trustee of the US$200 million bond), as the plaintiff, issued a "complaint" to Ziguang Xinsheng, a subsidiary of Unisoc Group. The cause of the case was a debt dispute, and the lawsuit requested the repayment of the principal of the US$200 million debt and related interest.

According to data from Wind, Ziguang Group’s current default default on principal and interest totals approximately 6.883 billion yuan. At the end of December this year, Ziguang Group also has a 1.3 billion yuan bond that will mature.

If reorganized, it will affect the equity structure of listed companies

Ziguang Group’s 2021 tracking rating report should have been announced before April 30 this year, but it has not yet been disclosed. China Chengxin International announced on June 30 that this is because Ziguang Group has not yet disclosed The 2020 annual audit report and the materials required to track the rating are also in the collection stage.

According to Ziguang Group’s 2020 semi-annual report, the company’s consolidated asset-liability ratio at the end of June 2020 was 68.41%, which was slightly improved compared to about 73% at the end of 2018 and 2019.Its interest-bearing debt scale accounts for more than 70% of the overall debt scale, accounting for a relatively large proportion. It was 156.691 billion yuan at the end of June 2020. Among the interest-bearing debts, the amount of interest-bearing debt due within one year was 81.428 billion yuan, accounting for 51.97%. This requires Ziguang Group to have a large amount of liquidity to repay the principal and interest of interest-bearing debt.

In the first half of 2020, Ziguang Group’s total operating revenue was 34.746 billion yuan and net profit was -4.544 billion yuan, an increase of 4.78% and a decrease of 23.01% respectively compared with the same period in 2019.

Image source: Ziguang Group Corporate Bond 2020 Semi-annual Report

Ziguang Group owns a number of listed companies, mainly involving fields such as chips and cloud computing. In terms of chip business, its subsidiaries Unisoc , Unisoc Micro , Yangtze Storage , and Lilianxin are all leaders in the chip segment; in terms of cloud network business, H3C is the leading full industry chain Cloud network equipment and service companies. It is worth mentioning that on July 8, the market value of Ziguang Guowei exceeded 100 billion yuan for the first time, and the IPO process of Ziguang Zhanrui has also attracted industry attention.

After Ziguang Group disclosed the news, "Unisociety" listed companies Ziguang Guowei , Xueda Education, etc. successively issued announcements: "If Ziguang Group enters the reorganization process, the reorganization plan may have an impact on the company's equity structure, etc." However, the "Unigroup" listed company also emphasized that the creditor's application for reorganization of Ziguang Group did not have a direct impact on the company's daily production and operations. Currently, the company's various production and operation activities are carried out normally.

As of the press time of the "Daily Economic News" reporter, Ziguang Group had no information to disclose other than official announcements. According to a report by " Beijing Daily ", Unisplendour Group is only one of the shareholders of its affiliated companies and may not directly affect its affiliated companies.

Lawyer Xu Feng said that Enterprise Bankruptcy LawThe conditions for initiating preliminary review are companies with serious losses and inability to pay off due debts. However, for companies with obvious economic value and other salvage value, new strategies can be introduced through reorganization Investors, etc., "resurrect" the company. Bankruptcy and reorganization are one of the possible options for creditors to maximize benefits. Lawyer

introduced that the bankruptcy and reorganization of Founder Group is a case that can be understood as a reference. After the reorganization, China Ping An replaced Peking University and obtained the controlling stake of Founder Group . The controlling stake of Founder Group changed accordingly. Business strategies may also change.

Daily Economic News