On September 24th, a Report of Evergrande Group on Striving for Support of Major Asset Restructuring Projects was circulated on the Internet. In this paper, Evergrande Group implores Guangdong government to support major asset restructuring. If the reorganization is not completed, it may lead to a series of systemic risks.
Evergrande Group also stated that if the reorganization cannot be completed on time, the interests of the minority shareholders of Shenfang will be greatly damaged due to the suspension of trading for four years, which will lead to legal proceedings or rights protection actions for all parties to the transaction and the regulatory authorities.
The following is the full text of the petition letter:
Report of Evergrande Group Co., Ltd. on Seeking Support for Major Asset Restructuring Projects
Guangdong Provincial People's Government:
First of all, I would like to thank the provincial party committee and government for their concern and support for Evergrande Group. In order to implement the guiding opinions of the Central Committee of the Communist Party of China and the State Council on deepening the reform of state-owned enterprises and respond to the supply-side structural reform, with the concern of Guangdong Provincial Party Committee and Provincial Government and the guidance and support of Shenzhen Municipal Party Committee and Municipal Government, listed companies Shenzhen Special Economic Zone Real Estate (Group) Co., Ltd. (Shenfang) and Evergrande Real Estate Group Co., Ltd. (Evergrande Real Estate) carried out major asset restructuring in the same industry, and deepened the reform of state-owned enterprises by means of marketization. The specific situation is now reported as follows:
I. Basic information of this reorganization
20 16 16 10. On 3 October, Evergrande Real Estate and Shenfang signed the Reorganization and Listing Cooperation Agreement, and Shenfang issued A shares to purchase 0/00% equity of Evergrande Real Estate, and Evergrande Group will become the controlling shareholder of Shenfang.
1.2065438+On June 20, 2007, HKEx officially agreed to the application for the spin-off and listing of Evergrande Group and the reorganization of A shares of Evergrande Real Estate, which was the largest main business spin-off approved by HKEx. Since the reorganization was initiated on 20 16, the competent leaders of Shenzhen Municipal Government, Shenfang, Evergrande Real Estate, CSRC and relevant departments have held several special meetings for communication and demonstration. They all believe that this reorganization conforms to relevant laws and regulations, is an important measure to promote the reform of state-owned enterprises, and is conducive to improving the quality of listed companies and stimulating the vitality of the capital market.
2065438+In March 2007, Evergrande Real Estate introduced a strategic investment of13 billion yuan according to the relevant laws and regulations of China Securities Regulatory Commission and Shenzhen Stock Exchange.
This reorganization belongs to the merger and reorganization of the same real estate industry and the optimization and integration of existing real estate, without increasing the number of listed real estate companies and without any direct or indirect financing. At the same time, Evergrande Group promises not to reduce its shares or pledge financing for five years, and promises that the annual cash dividend ratio of listed companies will not be less than 68% within five years.
Two. Implementation of Real Estate Regulation Policy of Evergrande Real Estate
Evergrande Real Estate has been firmly implementing various national real estate control policies, such as "no speculation in housing", "stable land price", "stable house price", "stable expectation" and "risk prevention".
1. Adhering to the concept of Minsheng Real Estate, the product positioning meets the rigid demand.
The company accurately grasps the "residential property", and 96% of the products are ordinary houses below 140 square meters. In the first half of 2020, the average selling price of residential products with decoration was 9030 yuan/square meter, which was 8020 yuan/square meter after deducting the decoration cost.
2. Insist on housing and not speculating, and keep the sales price stable since the regulation.
Evergrande Real Estate is not a real estate hoarding and does not drive up housing prices. In 20 17, 20 18, 20 19, and the first half of 2020, the sales prices of Evergrande's houses were 9960 yuan/m2, 105 15 yuan/m2 and1m2 respectively.
3, resolutely do not hoard land, do not speculate, and do not raise land prices.
Evergrande Real Estate strictly stipulates that the premium rate of land acquisition for bidding, auction and hanging projects shall not exceed 20%, and all projects must start construction according to laws and regulations immediately after land acquisition. In 20 18, the average premium rate of land for auction and auction was 14%, in 2009 it was 20 1 1%, and in the first half of 2020 it was 10.7%, which has not been obtained since the real estate regulation. At the same time, actively help resolve industry and financial risks, 54% of new land reserves are non-performing real estate enterprise projects and mergers and acquisitions of non-performing assets of financial institutions, and more than 200 projects have been revitalized.
4. Take the initiative to reduce debts and promote the healthy development of enterprises.
By introducing strategic investors, repaying debts in advance and controlling the scale of land acquisition, the company's asset-liability ratio has increased from 92. At the end of 20 16, it was 77. 9%. 9% at the end of 20 19.
Three. Basic situation of healthy development of Evergrande Real Estate
Evergrande Real Estate ranks first in the comprehensive strength of real estate enterprises in China. After introducing the strategic investment of 654.38+03 billion yuan to increase capital, the business scale of Evergrande Real Estate increased greatly, and the sales increased from 373.4 billion yuan in 2065.438+06 to 6065.438+09.
At present, Evergrande Group ranks 152 among the top 500 enterprises in the world. Since its establishment 24 years ago, it has borrowed 22,360 loans, involving an amount of 3491200 million yuan. There has never been a loan extension, and all the principal and interest are repaid on time before the loan expires.
Four. If the restructuring of Evergrande Real Estate cannot be completed as scheduled, it may lead to a series of systemic risks.
1, the capital of Evergrande Real Estate is greatly reduced. If the cash flow is broken, the company must repay the strategic investor's principal130 billion yuan and dividend137 billion yuan before 20210. 65.438+03 billion yuan will be converted from equity to liabilities, and the asset-liability ratio will rise to more than 90%, which may lead to the break of cash flow of Evergrande Real Estate.
2. The cash flow break of Evergrande Real Estate will cause Evergrande Group to be unable to repay its debts, which will lead to financial systemic risks.
By June 30, 2020, the balance of interest-bearing liabilities of Evergrande Group was 835.5 billion yuan. There are 128 banking financial institutions involved, with a loan balance of 232.3 billion yuan, including domestic banking financial institutions 17 1 28, with a loan balance of 2 163 billion yuan, mainly including 29.3 billion yuan from Minsheng Bank, 24.2 billion yuan from Agricultural Bank and 0/00 from Zheshang Bank. It involves non-bank financial institutions 1, 2 1, and the loan balance is 368.4 billion yuan, mainly composed of Everbright Trust 27.8 billion yuan, Shandong Trust/kloc-0.76 billion yuan, Foreign Trade Trust/kloc-0.67 billion yuan, AVIC Trust/kloc-0.33 billion yuan, and CITIC Trust/. It involves 49.6 billion yuan of domestic corporate bonds and 654.38+085.2 billion yuan of overseas bonds.
If Evergrande Real Estate fails to complete the restructuring on time, it may lead to the break of its cash flow, which will lead to the cross-default of Evergrande Group in relevant banks, trusts, funds and other financial institutions and bond markets, which will lead to financial systemic risks.
3. It seriously affects the normal operation of upstream and downstream enterprises and is not conducive to the healthy development of the economy.
At present, there are 844 1 upstream and downstream cooperative enterprises. If the cash flow of Evergrande Real Estate breaks, it will directly affect the normal operation of upstream and downstream enterprises, and some enterprises will even face the risk of bankruptcy, which will seriously affect the stable and healthy development of the economy.
4. Seriously affect employment and social stability.
By June 30, 2020, Evergrande Group had 792 projects, covering 229 cities, with 65.438+0.23 billion square meters of projects under construction, 6.5438+0.4 million employees and 3.65438+0.7 million employees. If the cash flow of Evergrande Real Estate breaks, Evergrande Group will fall into crisis, which will directly affect the stable employment of 33 1 10,000 people. At the same time, 2.04 million owners of 6 1.7 sets of commercial houses that have been sold but not delivered are facing the risk of unfinished projects or failure to take over the buildings, which seriously affects social stability.
5, triggered a large-scale group rights protection, seriously affecting the health and stability of the capital market.
If the reorganization cannot be completed on time, the interests of Shenfang minority shareholders will be greatly damaged due to the suspension of trading for four years, which will lead to legal proceedings or rights protection actions against both parties to the transaction and the regulatory authorities.
The major asset reorganization of ShenShenfang and Evergrande Real Estate conforms to the spirit of the State Council's pilot project on comprehensive reform of regional state-owned assets and state-owned enterprises, and is of great significance to promoting the mixed reform of state-owned enterprises and promoting the healthy development of the capital market. Due to the tight time, please pay attention to and coordinate with the provincial government.
I hereby report it.
Hengda group co., ltd
August 24(th), 2020
The following is the picture content of the network transmission file: