The hottest private Hong Kong stock restructuring

2022-08-11
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The first private Hong Kong stock restructuring has been pending for years. Zhejiang glass fell into a high debt crisis

in 2001, Feng Guangcheng, who came from a small town in Shaoxing and was a bricklayer, sounded the opening bell of the first H-share private enterprise in Hong Kong. What made him famous? Now, what makes him retreat, "don't want to be a major shareholder"

from 206 Jin to 158 Jin, Feng Guangcheng, chairman of Guangyu group, a private enterprise in Zhejiang, not only lost his weight in more than a year, but also lost the "financing platform" - Zhejiang Glass Co., Ltd., which he personally created

the debt is more than 9 billion yuan, not including some printing money that is not on the table. Which is responsible by Guangyu group and which is responsible by its affiliated enterprise Zhejiang glass is still unknown in the difficult interview process. But at least one thing is clear. These liabilities, which are difficult to clarify, have made Zhejiang glass, the first private Hong Kong stock in China, go on the road of restructuring for a year

"which (fallen) Zhejiang enterprise did not fall under the exploitation of printing money?" Feng Guangcheng, who agreed to be interviewed by China economic weekly after several appointments, couldn't help improving his accent and waving his arms when talking about Indian money

in Feng Guangcheng's view, the enterprise has been "unable to tear down east walls to make up for west walls", because there is no "social capital" willing to lend him money. Faced with creditors who want to charge, Feng Guangcheng's position is very simple. "The government's relief team has long been established. Anyone who wants to charge, go to the government to register."

Feng Guangcheng and Zhejiang Glass

Yangxunqiao, Shaoxing County, is a small town that was once in the spotlight because of Feng Guangcheng. In 2001, Feng Guangcheng's Zhejiang Glass kicked off the opening of the first H-share private enterprise in Hong Kong. Since then, Yang xunqiao has seven listed companies in one town, which is crowned with the shining aura of "China's leading listed town"

according to people who know Feng Guangcheng, Feng Guangcheng has worked as a bricklayer with his father since he was about 16 years old. After having primitive accumulation, he established the Guangyu group in 1985, and then set foot in ceramics, glass, cement, alkali industry, railway and other industries. So far, Feng Guangcheng still holds more than 90% of the shares of Guangyu group. But it was Zhejiang glass, which he founded in 1994 and listed in Hong Kong stock market, that made Feng Guangcheng really start his business

Ying Guangyu, the vice chairman of the board of directors of Guangyu group, introduced to China Economic Weekly that Guangyu group is currently only a governance organization and has no shares in Zhejiang glass, but Feng Guangcheng, the chairman of the board of directors but a person like me who has never operated a hydraulic universal experimental machine, is the leading majority shareholder of Zhejiang glass as a natural person and has served as the chairman of Zhejiang glass. The website of Guangyu group also shows that Zhejiang glass is an authorized enterprise of Guangyu group. According to the mid-2009 report of Zhejiang glass, as of June 30, 2009, Feng Guangcheng still held Zhejiang Glass 3. 8.4 billion shares, accounting for 48% of the total share capital. 92%。

I saw this introduction on the website of Zhejiang Glass Company: "over the past seven years since its listing on the Hong Kong stock exchange, its business performance has ranked first in the country among its peers." "At present, Zhejiang glass production is not disorderly, the operation is smooth, the management is full of vitality, and is full of determination and belief in the face of fierce market competition and future development."

however, the company's website has not been updated since December 2, 2009. Different from what the company said, at the beginning of 2009, Zhejiang glass had been too close to breaking the capital chain and began to seek government assistance. According to insiders, some local people who have financial contacts with Feng Guangcheng have hardly seen him since then

the capital chain is broken

Hu bin (a pseudonym), the boss of a construction company in Hangzhou, Zhejiang Province, who signed a loan contract of 40million yuan with Guangyu group on April 19, 2007, and then signed a renewal loan contract twice in a row, has never been able to return the remaining money since he recovered the principal of 15million yuan again in May 2008. Even so, this debt of Hangzhou is still regarded by Feng Guangcheng as "one of the best repayment" of all "social loans"

in Hu Bin's view, "Guangyu borrowed money to repay money and was very trustworthy, which is why everyone is willing to lend money to them." However, the situation changed in 2007. Guangyu group not only requested to postpone the repayment one month later, but also the repayment speed became slower and slower in the subsequent repayment plan. This makes Hu Bin's company also in a tight financial situation

Zhejiang glass was also involved because it guaranteed the arrears of Guangyu group. As of June 30th, 2009, there were still 27. For Zhejiang glass with 900million yuan, the debt of 40million yuan doesn't seem to be a big figure, but Zhejiang glass is 29 in the current period. The net active liabilities of 8.8 billion yuan, however, makes it impossible to doubt the sustainable operation ability of Zhejiang glass. The financial statements of Zhejiang glass also showed that as of June 30, 2009, the outstanding bank loans were 53. 100million yuan, of which about 26. 900million yuan must be repaid within one year

before 2007, Guangyu group and Zhejiang Glass began to borrow printing money to repay bank loans because the bank gave the red light to enterprise credit

on September 29, 2008, Hualian Sanxin, a Shaoxing petrochemical enterprise that suddenly stopped production, gave Zhejiang glass a blow. Among the initiators of Hualian Sanxin, two enterprises, Zhanwang group and jiabaili group, have become the object of bank debt recovery due to the huge guarantee they once provided, while Zhejiang glass and several other large enterprises have been implicated because they provided guarantees to Zhanwang group and jiabaili group

"mutual guarantee between parent and subsidiary companies and between enterprises is almost commonplace in Zhejiang." A business person in Zhejiang told China Economic Weekly, "the bank's loan requirements for private enterprises are to have collateral. What can be pledged has long been pledged. How can we finance without mutual guarantee?"

Hualian Sanxin and a number of large Shaoxing enterprises that successively fell into financial crisis made Shaoxing jittery for a time, and major banks and corporate creditors rushed to Shaoxing to collect loans. Zhejiang glass has also become the object of bank debt collection. Subsequently, social borrowers rose on hearing the news, leaving Zhejiang glass with no chance to "tear down east walls and make up for west walls"

"at present, the loans owed by Guangyu group and Zhejiang glass to the bank have reached 8.1 billion yuan, which does not include more than 1 billion yuan of social loans." The newly appointed financial adviser of Guangyu group told China Economic Weekly that he could probably understand these figures. It is reported that many of the debts were rolled up profitably

the huge debt finally overwhelmed Zhejiang glass. In early 2009, Zhejiang Glass turned to the local government for help

the formation of high debt

according to a public report, before Zhejiang glass was listed, Feng Guangcheng and his entrepreneurial partners spent a full 15 years to make the total assets of Guangyu group reach 600million, and Chinese enterprises often achieve the renewal of generation 1 products by introducing foreign technology. In the short three years since Zhejiang glass was listed at the end of 2001, the total assets of Guangyu group have soared from 600million yuan to 6.5 billion yuan. Correspondingly, the short-term bank borrowings of Zhejiang Glass soared from 5million yuan when it was not listed in 2001 to more than 400million yuan in 2003. By 2009, the short-term bank loans of Zhejiang glass had reached 26. 900million yuan. These do not include long-term liabilities, guaranteed liabilities of Guangyu group and liabilities of social loans

"after Zhejiang glass was listed, banks began to send home loans, and immediately gave Zhejiang glass a 2.6 billion yuan loan." Ying Guangyu said

the bank's gift of money is just in line with the enterprise's idea of development and expansion. In Feng Guangcheng's memory, at least until 2005, enterprises still "have as many loans as they want" in banks

relevant data show that from 2001 to 2005, Guangyu group and Zhejiang Glass have made great efforts one after another:

from 2001 to 2003, Guangyu group entered the cement industry on a large scale, signed a large order to invest 2.2 billion yuan in Changshan County, Zhejiang Province to build four new dry process cement production lines, and also signed a "building materials leading order" of 12 new dry process lines and an investment of 5billion yuan

in 2003, the construction of Qinghai 1.8 million ton soda ash industrial base held by Zhejiang Glass investment started. The total investment of this project is 3billion yuan

at that time, it was reported that Zhejiang glass also planned to invest 1% by the end of 2005. 500million yuan is used to build six ultra-thin glass production lines to pry at least 17. A huge project of 500 million yuan

in 2005, Guangyu group also participated in the first Quzhou Changzhou Railway with private capital, and its shares are expected to exceed the total investment by 6. 1/3 of 7.5 billion yuan

no one can clearly understand Feng Guangcheng's real ideas at that time. At that time, Shaoxing enterprises had boundless scenery, many enterprises had abundant funds for activities, non-performing loans reached a record low, and profit margins reached a record high. Like Feng Guangcheng, they were blindly optimistic and attacked everywhere

perhaps it is these easy money that makes Feng Guangcheng "think more about the benefits and less about the disadvantages of the increasingly mature R & D technology of domestic aircraft such as C919, Yun 20 and j 20."

in 2005, the state carried out macro-control according to the economic situation at that time, controlled the excessive expansion of fixed asset investment, strictly controlled new projects, seriously cleaned up projects under construction, strengthened land use and credit management, and prevented inflation and the "ups and downs" of the economy. In 2006, the effect of macro-control further appeared, and the market began to generally lack determination and belief in private enterprises with relatively narrow sources of funds. Guangyu group and Zhejiang Glass suffered a head-on blow at that time: the sales price of glass fell sharply, "no one wants things, there is no way but to reduce production and prices", and the economic efficiency fell sharply. In 2008, the glass industry, which had just recovered, was hit again by the financial crisis. As of December 31st, 2008, the annual net profit of Zhejiang Glass decreased by 36%. 85% to 1. 7.4 billion yuan, and the company made a net profit in the same period of 2007. 7.6 billion yuan

guarantee, macro-control, excessive expansion, financial crisis, which is the last straw to crush Zhejiang glass

around 2008, Zhejiang glass was frequently sued for arrears, but Tian Yifeng, the legal adviser of Guangyu group, said "no comment" about how many arrears have become litigation cases. However, many parties learned that in the Department lawsuit, Feng Guangcheng guaranteed Guangyu group and Zhejiang Glass in his own name, which made the fate of Guangyu group and Zhejiang Glass closely linked

when inquiring about the relevant public information of Zhejiang glass, the auditor of Zhejiang Glass pointed out in his speech that Zhejiang glass had two advances and one lawsuit, and at the end of 2008, the activity liabilities exceeded the activity assets by about 24. 7.8 billion yuan, there is a major uncertainty about the company's ability to continue operations

the auditor pointed out in his speech that as of the end of December 2008, Zhejiang glass had advanced a total of about 1. 0.2 billion yuan was given to the two entities, and the corporate governance said that the advance was the advance payment for the purchase of raw materials and building materials; As of the end of March 2009, Zhejiang glass has made a total of 2 to one and the third of the above two entities. Further advances of 6.8 billion yuan, but the auditors did not receive the relevant goods confirmation, nor could they obtain appropriate explanations and evidence about the transaction

in addition, Zhejiang glass and its Chairman Feng

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