The reporter learned exclusively that the Guangdong provincial government recently convened a meeting of a number of real estate enterprises, including state-owned and private enterprises such as Aoyuan group, R & F real estate, Yajule, Poly Real estate, CNOOC real estate, Minmetals real estate, Yuexiu real estate and Pearl River industrial group. According to people familiar with the matter, some accident enterprises introduced their operations and projects at the meeting. This meeting is equivalent to the “matchmaking” of the government for several state-owned enterprises and central enterprises to collect and merge the accident real estate enterprises.
“It’s true!” The wave of debt bearing M & A of real estate enterprises may attack
On January 7, the real estate sector rose significantly against the trend, and several real estate stocks rose by more than 5%.
Behind this, a relevant heavy news spread in the market.
On January 6, some media reported that at present, the bank has informed some large high-quality real estate enterprises that the relevant M & A loans will no longer be included in the relevant indicators of the “three red lines” for the debt bearing acquisition of the projects of the insured enterprises.
subsequently, a number of real estate enterprises confirmed to the reporter of Shanghai Securities News that the news was true.
“It’s true! According to regulatory requirements, the bank’s M & A loans for the acquisition of real estate enterprises in danger are not included in the relevant indicators of the” three red lines “of real estate enterprises.” A top 20 real estate executives told reporters.
A head real estate enterprise told reporters that recently, a number of financial institutions have come to communicate with the company on relevant projects, but the specific relevant indicators still need to be further clarified.
Insiders of a top ten real estate enterprises told reporters that the instruction was told to real estate enterprises through “window guidance”. At present, the company has no plan to collect mergers and acquisitions (for projects of real estate enterprises in danger).
However, some private real estate enterprises told reporters that they had not received the policy information.
Industry insiders told reporters that the policy aims to promote large high-quality real estate enterprises to merge and acquire endangered real estate enterprises, so as to effectively resolve risks and stabilize market expectations.
There are two main modes of enterprise M & A, one is asset acquisition, the other is debt acquisition. In the past few years, the real estate industry has staged scenes of big fish eating small fish, but most of them belong to asset acquisition.
The so-called debt bearing M & A refers to that the acquirer undertakes or pays off the debts of the target company as part or all of the consideration for purchasing equity in equity M & A. This is mainly used in the acquisition of insolvent enterprises.
The advantage of debt bearing acquisition lies in the preferential conditions of tax relief and debt repayment. In the early stage, it was mainly used in the transfer and restructuring of loss making state-owned enterprises.
“Debt acquisition has long been common in the real estate industry.” Relevant professionals told reporters that in the past, many acquisition cases in the industry were debt bearing acquisitions, and their potential risks are mainly reflected in that after the acquisition of the target company by real estate enterprises, if the market is in an upward trend, it is relatively small; If the market goes down, the acquired assets may face a discount or even difficult to realize, and there may be risks. Therefore, the key is the pricing of the transaction. If the acquired party is unwilling to lower the transaction conditions of the project, or it is difficult to reach a transaction, it is very important to predict the future trend of the real estate market.
At the end of August 2021, sun Hongbin, chairman of the board of directors of rongchuang China, said at the performance meeting that there is basically no M & a market at present, because the seller needs M & a debt at the same time of M & A regardless of the price, which is impossible.
Recently, Jinke Property Group Co.Ltd(000656) invested 1 yuan to acquire some project assets of Blu ray, which seems to support the relevant views.
On December 23, 2021, Sichuan Languang Development Co.Ltd(600466) announced that the wholly-owned subsidiaries of the company, Sichuan Languang Hejun Industrial Co., Ltd. and Chengdu Junyu Enterprise Management Co., Ltd., planned to transfer 100% of the equity of Chongqing YANGJIU Trading Co., Ltd. to Chongqing yueningshan Enterprise Management Co., Ltd.
Both parties unanimously confirm that this transaction is conducted in the form of debt bearing acquisition. The consideration of 100% equity of Chongqing YANGJIU is only 1 yuan. However, Chongqing yueningshan Enterprise Management Co., Ltd. will bear the subject liabilities agreed in the agreement. Chongqing yueningshan Enterprise Management Co., Ltd. is a subsidiary of Jinke Property Group Co.Ltd(000656) .
Immediately, Sichuan Languang Development Co.Ltd(600466) received the inquiry letter issued by the exchange.
According to the announcement, before the transfer, Sichuan Languang Development Co.Ltd(600466) will restructure the assets of Chongqing YANGJIU, including Chongqing YANGJIU and its subordinate Chongqing future city 104 Mu project, Chongqing Furong residence project and Tianjin station. The book net assets of Chongqing YANGJIU after the simulated transaction is RMB 1.484 billion, and the price of this transaction is only RMB 1.
In this regard, the Shanghai stock exchange requires the company to explain the reason and rationality of the transaction pricing of only 1 yuan, and whether the transaction arrangement damages the interests of listed companies.
In addition, according to the announcement, the subject matter of this transaction is valued by the asset-based method, and the total equity evaluation value is determined to be RMB 2.2846 million, which is far lower than the book net assets after the simulated transaction.
Therefore, the Shanghai stock exchange requires the company to supplement and disclose the detailed process, main assumptions, value of evaluation parameters and determination basis of asset-based method evaluation, disclose the book value and evaluation value of each item in the balance sheet in tabular form, and explain the causes and rationality of large differences by item.
On January 4, Sichuan Languang Development Co.Ltd(600466) said in its reply that the main purpose of the company’s transaction is to solve the construction and delivery of difficult projects. According to the appraisal, the investment value of all shareholders’ equity of Chongqing YANGJIU Trading Co., Ltd. on the benchmark date of August 31, 2021 is RMB 2.2846 million. This transaction is based on the appraisal report. After negotiation, all parties reach an agreement that the consideration for Chongqing yueningshan to acquire 100% equity of Chongqing YANGJIU held by the company is 1 yuan.
Sichuan Languang Development Co.Ltd(600466) said that due to the project involved in this transaction facing financial debt default, project payment arrears and other reasons, there are suspension of construction and abnormal construction, and it is difficult to ensure project delivery. This transaction is carried out under the background of safeguarding the interests of all parties involved in real estate development, realizing the original intention of real estate development and ensuring delivery, At the same time, the transaction adopts debt bearing acquisition, which can reduce the company’s liabilities by 9.191 billion yuan while selling assets, which is conducive to the company’s solution to the current debt problem. Therefore, under the above transaction background, the company’s transaction is based on the assessed value, the transaction price is fair and reasonable, and there is no damage to the interests of the listed company.
Recently, the central bank and the China Banking and Insurance Regulatory Commission jointly issued the notice on doing a good job in M & a financial services for risk disposal projects of key real estate enterprises, encouraging banking financial institutions to carry out M & A loans for real estate projects in a stable and orderly manner in accordance with the principles of legal compliance, controllable risk and commercial sustainability, Support high-quality real estate enterprises to merge and acquire key real estate enterprises.
Zou LAN, director of the financial market department of the central bank, said that project M & A among real estate enterprises is the most effective market-oriented means for the real estate industry to resolve risks and realize liquidation. He stressed that in the long run, promoting the structural adjustment of the real estate market through mergers and acquisitions and other market-oriented methods is conducive to the reduction of assets and liabilities of high debt enterprise groups, while protecting the legitimate rights and interests of housing consumers, guiding market subjects to pay more attention to the risk assessment and management of the project itself, and forming a new development model of real estate, Promote the virtuous circle and healthy development of the real estate industry.
(source: financial Associated Press)
