Under the investment of Shenzhen state-owned assets and AMC, Guangtian Group, a leading enterprise in the decoration industry, recently announced the successful reorganization and changed from a private enterprise to a state-owned enterprise. The stock abbreviation was changed from "*ST Grandland" to "Grandland Group" and resumed trading today.
The reorganization was completed in less than a year
It took only one year from being adjudicated to bankruptcy reorganization to announcing the success of the reorganization, and the powerful investors made great contributions.
The total amount of confirmed claims of Grandland Group is 15.33 billion yuan, and a total of one industrial investor and four financial investors have been ushered in. Among them, the industrial investor is the Special Zone Construction Engineering Group, a subsidiary of the Shenzhen State-owned Assets Supervision and Administration Commission, and the four financial investors are Shenzhen High-tech Investment Group, Qianhai Foundation, Zhongyuan Trust and CITIC Financial Assets.
According to the "Announcement on the Implementation of the Conversion of Capital Reserve into Share Capital of the Reorganization Plan", based on the total share capital of 1.537 billion shares, the capital reserve will be converted into share capital according to the ratio of 14.40 shares for every 10 shares, and 2.214 billion shares will be converted. Among them, the Special Zone Construction Engineering Group has a total consideration of 825 million yuan and a conditional equal number of shares. High-tech Investment Group invested 199 million yuan, Zhongyuan Trust invested 147 million yuan, and CITIC Financial Assets invested 36 million yuan.
Up to now, a total of 1.414 billion yuan of reorganization investment has been received from investors. Together with the 9.4 billion yuan of debt-to-equity swap, a total of 10.843 billion yuan of debts can be paid. The 1.414 billion will be mainly used to pay off debts in cash, pay bankruptcy expenses, etc., and the remaining part will be used to supplement the company's liquidity.
The main reason why Grandland Group filed for bankruptcy was because its largest customer, Evergrande Group, defaulted on a huge amount of construction payments, resulting in a cash flow breakdown.
As of the end of 2022, the original value of accounts receivable from Grandland Group to Evergrande Group totaled 8.87 billion yuan, of which the original value of accounts receivable was 6.346 billion yuan and the original value of contract assets was 2.524 billion yuan. Since Evergrande had exploded at that time, the accounts could not be recovered in a short period of time, and an impairment provision of 6.83 billion yuan had been made. Therefore, in the reorganization plan, Guangtian Group divested non-core assets such as project receivables from Evergrande Group and equity of loss-making subsidiaries. Only assets such as Hongling North Construction Engineering Digital Intelligence Building, monetary funds, and receivables of high-quality projects are retained.
The operating performance and cash flow of the "light" Guangtian Group have improved significantly. Although the loss in the first quarter of 2024 is 59.94 million, it has narrowed compared with the statistical loss of 140 million yuan last year. At the same time, the balance of book funds is still 483 million yuan. Guangtian Group also said that in the future, it will also focus on the main business of architectural decoration and deepen the market in the Greater Bay Area.
Changed hands to Shenzhen state-owned assets
After the completion of the implementation of the reorganization plan, the Special Zone Construction Engineering Group will become the largest shareholder of Grandland Group. The shareholding of Ye Yuanxi and Guangtian Holdings, the former actual controllers, decreased to 21.44%.
According to Netease Qingliu, the explosion of Guangtian Group, in addition to Evergrande is the first element, is also related to its "lending" business in the early years. In order to obtain more business opportunities and orders, Grandland Group established Guangrong Fund to provide project loans to developers through financial institutions. In addition, Grandland Group also has financial subsidiaries such as guarantee companies and small loan companies to provide financing services for upstream and downstream. With the downturn in the real estate market, these "financial institutions" have also seen a large amount of money that cannot be recovered.
However, in the 15 years of deep binding with Evergrande, Guangtian Group was successfully listed and became the industry leader, but "success is also Xiao He, failure is also Xiao He". Today, Evergrande Group's risk mitigation is still in progress, and Guangtian Group has gotten rid of the "phantom" of the past and has been reborn.
AMC deep nuggets listed company bankruptcy reorganization
There have been more and more cases of successful reorganization of listed companies with the participation of AMC, and this year, there is a successful reorganization of Xinhualian, a large real estate company in Hunan, and the stock has risen for three consecutive days after the resumption of trading. China Merchants Ping An Asset Management Co., Ltd., as the second largest investor or book profit.
In June, Chongqing China Resources Yukang also participated in the bankruptcy reorganization of Dongyin Group and Dima shares, and in addition, the reorganization of Jinke of Great Wall Asset Investment is also advancing.
According to statistics, in recent years, *ST Zhengbang (has been awarded the star on June 12), *ST Toyo (has been awarded the star on June 7), *ST Jinglan, *ST Xigang, *ST Mingcheng and other listed companies have participated in the bankruptcy reorganization process of national AMC and local AMC. As a professional non-performing asset disposal institution, AMC has more experience in bad debt recovery, asset restructuring and risk resolution, and can better analyze the risks and returns of bankruptcy reorganization business.