Evergrande group’s debt restructuring seems to be advancing step by step.
Zhejiang Construction Investment Group Co.Ltd(002761) ( Zhejiang Construction Investment Group Co.Ltd(002761) . SZ) announced on the 29th that the company to be restructured involves some receivables of Evergrande group and its subsidiaries. Zhejiang Jingcheng Tourism Group Co., Ltd. (hereinafter referred to as “Zhejiang Jingcheng group”) will participate in the transaction of real estate receivable from Zhejiang Jingcheng Tourism Group Co., Ltd. (hereinafter referred to as “Zhejiang Jingcheng group”). According to the plan, Zhejian real estate will continue to invest in the construction of Hangzhou Crystal City project.
Zhejiang Construction Investment Group Co.Ltd(002761) receivables of Evergrande involved in restructuring
According to Zhejiang Construction Investment Group Co.Ltd(002761) announcement, Zhejiang Construction Engineering Group Co., Ltd. (hereinafter referred to as “Zhejiang construction engineering”), a wholly-owned subsidiary of the company, plans to reach a tripartite transfer agreement with Hangzhou Jingli Real Estate Co., Ltd. (hereinafter referred to as “Jingli real estate”), a holding company of Evergrande group, and Zhejiang construction real estate.
According to the contents of the agreement, Jingli real estate, as the transferor of Hangzhou Crystal City project, Zhejiang construction real estate, as a professional real estate development company, has transferred Hangzhou Crystal City project and will be responsible for the follow-up development and construction of the project through the establishment of a project company. Zhejiang construction, as a professional general contracting construction unit, is responsible for the follow-up construction of Hangzhou Crystal City project. It is expected that the construction amount of follow-up works will not exceed 2.4 billion yuan.
Zhejian real estate is a related party of Zhejiang Construction Investment Group Co.Ltd(002761) and the two companies are actually controlled by Zhejiang state owned Capital Operation Co., Ltd. (hereinafter referred to as “Zhejiang state owned assets operation company”); Zhejiang state owned assets operation company is a wholly-owned subsidiary of Zhejiang SASAC.
According to the assessment, under the assumption of development, the value of the equity of Hangzhou Crystal City project is 3.66 billion yuan, and Zhejiang construction real estate uses 921 million yuan of the transfer consideration to offset the payables of Evergrande group and its subsidiaries to Zhejiang construction engineering and its subsidiaries in Hangzhou; The remaining transfer consideration will be disposed by means of realization or premium sale and mortgage repayment, and the debt gap of Hengda Group and its subsidiaries in Hangzhou and Huzhou will be resolved in accordance with the unified requirements of relevant government departments; If there is any surplus, it can be used to offset the 695 million yuan payable by Evergrande group and its subsidiaries to Zhejiang construction engineering group and its subsidiaries in Huzhou.
It is reported that the above agreement may resolve the total amount of receivables of Zhejiang Construction Investment Group Co.Ltd(002761) involving Evergrande group and its subsidiaries, which does not exceed 1.65 billion yuanp align=”center” style=”text-align:center;”> Source: screenshot of announcement
after the Spring Festival Zhejiang Construction Investment Group Co.Ltd(002761) share price soared inexplicably
Zhejiang Construction Investment Group Co.Ltd(002761) said that the company’s current receivables restructuring business is conducive to accelerating the resolution of the company’s overdue receivables related to Evergrande group and its subsidiaries. At the same time, the listed company also said that under the guidance of governments at all levels, the follow-up companies will strengthen communication with local regulatory authorities and Evergrande group, and actively take measures to speed up the resolution of overdue bills receivable involving Evergrande group. The company does not rule out using the preemptive right of assignment and safeguarding the legitimate rights and interests of the company and investors through property preservation, legal proceedings and other means.
“The successful resolution of debt is very beneficial.” Some investors said in the stock bar. Others believe that the news is neutral and positive, because it can reduce the bad debt loss of the company’s accounts receivable.
According to the announcement of Zhejiang Construction Investment Group Co.Ltd(002761) 2021 in August, the company plans to withdraw a total of 106 million yuan of asset impairment reserves in the first half of last year, including 885499 million yuan of bad debt reserves for accounts receivable; In October last year, the company announced again that after testing, it planned to withdraw a total of 283 million yuan of asset impairment reserves in the third quarter of 2021, including 192 million yuan of bad debt reserves for accounts receivable.
As of September 30, 2021, Zhejiang Construction Investment Group Co.Ltd(002761) accounts receivable, notes receivable and contract assets totaled 56.067 billion yuan, accounting for 58.59% of the total assets of the current period.
It is worth mentioning that Zhejiang Construction Investment Group Co.Ltd(002761) share price has soared since the Spring Festival, from about 8 yuan / share to about 40 yuan / share. Since late March, the company’s share price has fallen, and is still around 32 yuan / share. In the face of changes in share prices, listed companies have said that there have been no significant changes in the company’s operation and internal and external business environment.
