Seven years ago, he was still one of the top ten richest people in China, and his net worth once surpassed that of Xu Jiayin's real estate tycoon Lu Zhiqiang, and his "Oceanwide System" did not wait for good news.
*ST Oceanwide (hereinafter referred to as Oceanwide Holdings) recently announced that during the company's pre-reorganization period, the interim administrator, Beijing Zhong Lun Law Firm, found that Oceanwide Holdings, as a listed company, no longer has the possibility of reorganization, and applied to Beijing No. 1 Intermediate People's Court to terminate the pre-reorganization procedure of Oceanwide Holdings. Accordingly, the Beijing No. 1 Intermediate People's Court decided to terminate the pre-reorganization of Oceanwide Holdings.
The failure of the pre-reorganization, coupled with the fact that Oceanwide Holdings' financial data did not improve at the end of the third quarter, has greatly increased the risk of delisting the company's shares. From 2020 to 2022, Oceanwide Holdings' net profit attributable to the parent company will be 4.62 billion yuan, 11.25 billion yuan, and 11.54 billion yuan respectively, and its total assets will drop from more than 180 billion yuan to 105.2 billion yuan. In the first three quarters of this year, Oceanwide Holdings' net profit attributable to the parent company was a loss of 6.89 billion yuan. In more than three years from 2020 to the present, Oceanwide Holdings has lost more than 34 billion yuan. The third quarterly report shows that as of the end of September 2023, the net assets attributable to shareholders of the parent company are -12.054 billion yuan (unaudited).
However, before hitting the financial delisting indicators, Oceanwide Holdings had locked in the delisting at face value in advance. And Lu Zhiqiang himself has now become an executor and is restricted from high consumption.
After fighting for more than half a year, the "1 yuan defense battle" finally failed
The face value has been locked in advance and delisted
Since November 30, Oceanwide Holdings has closed below the face value of 1 yuan for 11 consecutive trading days, and the latest closing price is 0.59 yuan per share, and the total market value has fallen to 3.066 billion yuan.
According to the regulations of the exchange, if the daily closing price of the company's shares is lower than 1 yuan per share for 20 consecutive trading days, the exchange will terminate the listing and trading of its shares. Based on the closing price of 0.59 yuan on December 14, in the remaining 9 trading days, the company's stock price cannot return to 1 yuan even if the daily limit is limited. This means that Oceanwide Holdings has locked in the par value in advance and delisted.
At the opening of the market on the 15th, Oceanwide Holdings fell again.
Since the beginning of this year, Oceanwide Holdings has experienced many thrilling face value defense battles.
On April 14, the share price of Oceanwide Holdings fell below the face value of 1 yuan for the first time, and in just 9 trading days, the stock price once hit the lowest point of 0.77 yuan. In the face of the life and death line of delisting with a transaction price of less than 1 yuan for 20 consecutive trading days, the management of Oceanwide Holdings has taken action to protect the stock market many times, pulling the stock price back to more than 1 yuan.
On May 4, Oceanwide Holdings announced that the closing price of the company's shares was lower than 1 yuan per share for 11 consecutive trading days. At the same time, some of the company's directors, supervisors and senior managers plan to increase their holdings of the company's shares through centralized bidding in the secondary market within 3 months from May 5 (inclusive), with a total amount of not less than 30 million yuan.
The reason for the increase in holdings is based on the high recognition of the value of the company's assets and firm confidence in the future development prospects, in order to support the company's related work, and at the same time to enhance the confidence of investors.
The executives who increased their holdings were Luan Xianzhou, chairman of the board of directors (not less than 6 million yuan), Liu Guosheng, vice chairman, president and chief financial officer (not less than 6 million yuan), and Zang Wei, Pan Ruiping, Li Shuxiao, Zhao Yingwei, Feng Zhuangyong, and Luo Cheng (all not less than 3 million yuan), all of whom are directors, supervisors or senior managers of the company. At the same time, Tonghai Real Estate and Huaxin Capital, the concerted actors of the controlling shareholder China Oceanwide, simultaneously increased their holdings by 25 million yuan ~ 50 million yuan.
On May 11, Oceanwide Holdings' share price regained its position at the 1 yuan life and death line. In the following months, the management and major shareholders successively increased their holdings with real money, which once dispelled the doubts of the outside world, and the share price of Oceanwide Holdings was completely out of the life and death line of 1 yuan.
But things seem to have changed a little since the evening of September 25. On the evening of the same day, Oceanwide Holdings announced that at the hearing held in the Bermuda Court on September 22 (Bermuda time), the Bermuda Court issued a winding-up order against China Oceanwide Holdings, which is an overseas subsidiary of Oceanwide Holdings. By October 31, Oceanwide Holdings announced that due to the asset-liability ratio of 108.26% as of the end of September 2023, more than 90%, the investor protection mechanism was triggered.
On November 24, according to the announcement, Oceanwide Holdings originally planned to postpone the payment of the remaining principal of about US$210.2 million of the US dollar bonds in October to November 23, 2023, but considering the company's current liquidity arrangements and asset optimization and disposal progress, the above bonds could not be paid on November 23, 2023 as scheduled. The Company will continue to negotiate with bondholders on the repayment plan of the October USD bonds, raise funds to pay the interest of the October USD bonds as of November 23, 2023 as soon as possible, and plan to further postpone the payment of the October USD bonds to May 23, 2024.
As of November 28, in addition to the disclosed litigation and arbitration cases, Oceanwide Holdings and its holding subsidiaries have accumulated a total of 562.6724 million yuan in litigation and arbitration for 12 consecutive months, accounting for 10.30% of the company's latest audited net assets (absolute value).
Since then, the share price of Oceanwide Holdings has been declining, and it is difficult to turn back.
To add insult to injury, the company's previously announced shareholding increase plan was also not completed as scheduled.
Previously, the concerted action of China Oceanwide Holdings Group Co., Ltd., the controlling shareholder of the company, planned to increase its holdings of the company's shares through centralized bidding in the secondary market within 4 months from August 10, 2023 (including August 10, 2023), with a total planned increase of 50 million yuan to 100 million yuan. However, on December 11, Oceanwide Holdings announced that as of December 9, 2023, the expiration of the above-mentioned shareholding increase plan, affected by factors such as its own financial pressure and poor financing channels, the amount of the planned increase in holdings failed to reach the lower limit of the amount of the increase plan within the commitment period, and the total increase in holdings was only 7.6947 million yuan.
The reorganization was declared a failure
Analysts: May face the fate of bankruptcy
On April 21 this year, Lion Asset applied to the Beijing No. 1 Intermediate People's Court for a pre-reorganization of the company on the grounds that Oceanwide Holdings could not pay off its due debts, its assets were insufficient to pay off all its debts and it obviously lacked solvency, but it had reorganization value. On April 27, Beijing No. 1 Intermediate People's Court decided to initiate a pre-reorganization of the company.
On the evening of June 30, Oceanwide Holdings announced that the company's pre-reorganization work was advancing in a comprehensive and orderly manner, and was actively carrying out matters such as creditor's rights declaration and review, property investigation, audit and evaluation, communication with major creditors, and public recruitment of reorganization investors, and 13 intending investors had submitted registration materials. In the next step, the company will cooperate with qualified investors who have paid the margin to carry out due diligence and actively carry out investment plan negotiation and other related work.
However, on the evening of December 1, Oceanwide Holdings announced that according to the "Decision Letter" issued by the Beijing No. 1 Intermediate People's Court, during the pre-reorganization period, the interim administrator found that Oceanwide Holdings, as a listed company, no longer had the possibility of reorganization, and applied to the Beijing No. 1 Intermediate People's Court to terminate the pre-reorganization procedure of Oceanwide Holdings. Accordingly, the Beijing No. 1 Intermediate People's Court decided to terminate the pre-reorganization of Oceanwide Holdings.
According to the 21st Century Business Herald, analysts believe that this also basically declares the end of Oceanwide, that is, it may face the fate of bankruptcy.
At the same time, the Shenzhen Stock Exchange issued a regulatory letter to Lu Yang, the secretary of the board of directors of Oceanwide Holdings, stating that he was responsible for the relevant violations of Oceanwide Holdings, mainly including the failure to disclose the material debts of Oceanwide Holdings in a timely manner, the incomplete and inaccurate disclosure of some debt financing information and the decision-making procedures not in accordance with relevant regulations, and the failure to timely disclose the equity pledge of the subsidiary.
The actual controller was once one of the top ten richest people in China
The net worth once surpassed Xu Jiayin
As the helmsman of the "Oceanwide Department", Lu Zhiqiang was born in Weihai, Shandong Province in 1952 and started his business in 1985. In 1998, Lu Zhiqiang's Guangcai Business Investment Group Co., Ltd. was listed on the backdoor. Since then, after the change of equity, the company's stock abbreviation has changed from Guangcai Construction to Oceanwide Construction.
Real estate was once Oceanwide's main business. By 2013, Oceanwide Construction's real estate sales revenue was RMB5.844 billion, and the company's projects are distributed in Beijing, Wuhan, Shanghai, Shenzhen, Hangzhou, Qingdao, Dalian and Los Angeles in the United States.
At the beginning of 2014, the board of directors of Oceanwide Holdings made a decision on the strategic transformation and development of the company, transforming from a single listed real estate company to a comprehensive holding listed company covering finance, real estate, strategic investment and other businesses, and the company name was also changed to Oceanwide Holdings.
Since then, Oceanwide has continued to purchase financial assets. In 2014 alone, Oceanwide acquired about 73% of the equity of Minsheng Securities (later the shareholding ratio once reached 87.65%), initiated the establishment of a private investment platform company CMIG, and participated in the capital increase of the major shareholder's trust platform Minsheng Trust, indirectly holding 25% of the equity. In the Hong Kong market, Oceanwide Holdings acquired a 71.36% stake in Li Ka-shing's Hutchison Ganglu, which later became China Oceanwide Holdings. In 2015, Oceanwide Holdings acquired a 40.71% stake in Hong Kong-listed CASH Financial Services Group Co., Ltd. and a partial stake in Minan Property & Casualty Insurance Co., Ltd. for no more than 1.785 billion yuan, entering the insurance industry. In 2016, Oceanwide invested 7.5 billion yuan to increase its holdings in Minsheng Bank, and invested in the establishment of Minsheng Financial Services Holdings and the increase in capital in Minsheng Futures.
In just three years, Oceanwide has been involved in banking, securities, trust, insurance and other industries, and the financial sector has begun to take shape.
Lu Zhiqiang's return to the stage also shows the determination of Oceanwide Holdings to develop the financial field. In January 2014, Lu Zhiqiang's term of office as chairman of Oceanwide Construction expired, and Han Xiaosheng took over for a period of three years. But just over a year later, in May 2015, Lu Zhiqiang was re-elected as chairman. At the same time, a number of senior executives from banking, securities, insurance and other financial backgrounds have joined the board of directors.
The new board of directors has adjusted the organizational setup of Oceanwide Holdings, and set up 11 functional management departments and 8 industrial group headquarters. Among them, the eight major industrial groups cover Internet finance, insurance, securities, trust and banking, capital investment, electric power, real estate development and real estate investment management. At the time of the boom of Chinese enterprises "going overseas", Oceanwide also increased its overseas assets, and successively acquired real estate projects in Los Angeles, Hawaii and other places in the United States, as well as power plant projects in Indonesia, Genworth, and IDG. In the process, Oceanwide has reduced its new investment in the domestic real estate sector.
From the perspective of revenue scale and composition, Oceanwide's transformation was successful at that time. In 2014, the revenue of real estate business accounted for more than 75% of total revenue, and the proportion of financial and securities business was 20.4%. In 2017, the revenue of the financial sector surpassed that of the real estate sector for the first time. By 2020, the proportion of real estate business revenue once dropped to 15.19%. Up to now, Oceanwide Holdings' operating income is composed of 56.15% in the insurance industry, 42.72% in the real estate development and operation industry, 0.59% in the trust industry, and 0.31% in the securities industry.
From 2014 to 2020, Oceanwide Holdings' revenue increased from 8.08 billion yuan to 14.06 billion yuan. Lu Zhiqiang's personal wealth also rose, and in 2015 and 2016, he entered the top ten of the "Hurun Report" consecutively, and his net worth surpassed Xu Jiayin. As of 2020, Lu Zhiqiang's net worth is still as high as 62 billion yuan, ranking 66th.
"Luxury" acquisitions also come with high prices. Since its transformation in 2014, Oceanwide Holdings' total liabilities have risen rapidly and reached 183.67 billion yuan at the end of 2018. Although Oceanwide's assets exceeded 200 billion yuan that year, its asset-liability ratio remained above 80%.
In 2017, the real estate and financial industries with Oceanwide layout are facing changes in the policy environment. At the beginning of that year, real estate regulation deepened, and market transactions cooled subsequently. At the same time, with the crackdown on various financial chaos, strict regulation has become a theme in the financial sector and has continued until 2018.
At this time, the financial situation of Oceanwide Holdings also had problems. Affected by the policy environment, the net cash flow generated by Oceanwide Holdings' fundraising activities decreased significantly by 74.2% in 2017. By the end of that year, Oceanwide Holdings' short-term liabilities (due within one year) were about 33.5 billion yuan, and the company's cash flow was only 18 billion yuan.
Complete one's misery. The 8 billion yuan fake gold case of Wuhan Jinhuang Jewelry has exacerbated Oceanwide's difficulties and is also considered to be the fuse of the company's debt crisis. In May 2020, Minsheng Trust received the test results of Wuhan Jinhuang Jewelry's pledged gold, and an 83-ton fake gold case was revealed. Jinhuang Jewelry relied on these fake gold, which was gilded on the surface and copper alloy on the inside, to obtain a total of about 20 billion yuan of financing from financial institutions, of which Minsheng Trust involved 4.074 billion yuan. Under the pressure of many parties, Minsheng Trust and other trust institutions involved advanced funds to investors, which also led to the credit impairment loss of about 2.52 billion yuan in 2020, accounting for 56.1% of its total profit. Combined with the provision for impairment of some overseas projects and goodwill, the income of Wuhan real estate projects affected by the epidemic did not meet expectations, and foreign exchange losses, Oceanwide Holdings turned from profit to loss in 2020.
In addition, Minsheng Trust has also "stepped on the pit" many times, and encountered a series of events such as the "Carrot Chapter Incident of China Construction Fifth Bureau", the overdue bonds of Xinhualian, and the default of Baoneng Trust.
In addition to the factor of "stepping on the pit", the profitability of Oceanwide's financial business is not ideal. For example, from 2019 to 2020, the insurance business was its largest source of revenue, but the gross profit margin of this business was 1.59% and 2.82%, respectively, which was much lower than that of other business segments. In the following two years, the indicator was negative. At the beginning of 2021, the livelihood wealth of Oceanwide Holdings could not be redeemed when it expired, announcing a "thunderstorm".
In order to alleviate the financial pressure, Oceanwide Holdings began to sell assets for recovery very early. At the beginning of 2019, Oceanwide Holdings sold the No. 1 plot of Beijing Oceanwide International Residential Area and the Shanghai Dongjiadu project to Sunac after "covering" for more than ten years. But a discerning person can see at a glance that the return of funds is its more urgent need. At the beginning of 2021, a project in Wuhan was transferred for a total price of 3.066 billion yuan. In addition, Oceanwide Holdings will also sell its Zhejiang project and a number of overseas projects. Financial assets are also sold. Taking Minsheng Securities, which is regarded as "the best financial asset under Oceanwide", as an example, due to the overdue debt of 1.26 billion yuan of Oceanwide Holdings to Shandong High-speed, in March this year, 3.471 billion shares of Minsheng Securities held by Oceanwide Holdings were listed on the auction platform, with a starting price of about 5.865 billion yuan, and finally Guolian Group was auctioned for 9.105 billion yuan. Combined with the previous active sale, as of the end of June this year, the proportion of shares held by Oceanwide Holdings in Minsheng Securities has dropped to 31.23%. In addition, the shares of financial assets such as Minsheng Trust and Minsheng Bank held by Oceanwide Holdings have also been actively or passively sold, but it is also a drop in the bucket.
With the holding subsidiaries Wuhan Company, Minsheng Trust, Asia-Pacific Property Insurance and other companies part of the equity or part of the property under their names taken by the court to freeze, seize and other measures, Oceanwide Holdings' self-help has been tied to a certain extent.
Lu Zhiqiang, who used to be infinitely beautiful and had a net worth that surpassed Xu Jiayin, has now become an executor and is restricted from high consumption. And his name can no longer be found in this year's "Hurun Report".
Editor|Duan Lian, Yi Qijiang, Du Hengfeng
Proofreading|Cheng Peng
The daily economic news is integrated from the announcement of listed companies, Securities Times, every economic network (reporter: Chen Mengyu), 21st Century Business Herald, Hurun Report, enterprise check, public information, etc
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