12 days! HNA Group, burdened with more than trillion yuan of debt, has completed the leap from application to acceptance of bankruptcy reorganization.
15! This is the number of A-share listed companies that successfully completed bankruptcy reorganization in 2021. With the help of reorganization, these 15 companies have achieved rebirth.
Bankruptcy reorganization has become one of the main channels for clearing the risks of A-share listed companies. According to the information statistics of Shanghai Securities News, in 2021, a total of 25 listed companies started bankruptcy reorganization, 17 of the controlling shareholders of listed companies started bankruptcy reorganization, and another company implemented bankruptcy reorganization for joint-stock companies. The number of companies involved in bankruptcy reorganization was 43, a record high.
Policy support is undoubtedly the biggest help. The opinions on further improving the quality of listed companies issued by the State Council clearly puts forward to improve the bankruptcy reorganization system, optimize the process, improve efficiency, unblock the diversified exit channels of listed companies such as bankruptcy reorganization, and support listed companies to provide clear risk insurance through bankruptcy reorganization. At the beginning of this year, the Shanghai and Shenzhen Stock Exchange issued regulatory guidelines (Draft for comments) on the bankruptcy and reorganization of listed companies, and standardized the whole process of bankruptcy and reorganization.
In the past two years, the deepening of economic restructuring has exposed the risks and problems of some companies. It can be predicted that bankruptcy reorganization will become the choice of more risky companies. At the same time, with the improvement of laws and regulations and the maturity of the ideas of all participants, the road of bankruptcy reorganization of enterprises will be more transparent, fairer and smoother.
do not break or stand
bankruptcy reorganization volume and quantity reached a new high
On the evening of January 29, 2021, Hainan Airlines Holding Co.Ltd(600221) , Hna Infrastructure Investment Group Co.Ltd(600515) and Ccoop Group Co.Ltd(000564) simultaneously issued the announcement on the application for reorganization of controlling shareholders and important shareholders, announcing that HNA Group started bankruptcy reorganization. On February 10, 2021, HNA Group’s bankruptcy reorganization application was accepted by the court and entered the bankruptcy reorganization procedure according to law.
From the filing of the application to the acceptance of the ruling, the judiciary took only 12 days. In addition to speed, another feature of HNA Group’s reorganization is its large volume. Gu Gang, head of the joint working group of Hainan HNA Group and Secretary of the Party committee of HNA Group, introduced in September 2021 that HNA Group has received a total of 2 trillion yuan of creditor’s rights declaration since entering the bankruptcy reorganization procedure, and finally confirmed 1.1 trillion yuan of creditor’s rights.
On October 23, 2021, each reorganization plan (Draft) of the bankruptcy reorganization of HNA Group and related enterprises was voted through. According to the reorganization plan, the main aviation industry, the airport sector and the supply and marketing market (corresponding to Hainan Airlines Holding Co.Ltd(600221) , Hna Infrastructure Investment Group Co.Ltd(600515) and Ccoop Group Co.Ltd(000564) ) are recruited separately for war investment reorganization, and 321 enterprises such as HNA Group are merged and reorganized. After the reorganization, HNA Group will be split into aviation, airport, finance, commerce and other sectors to operate independently, led by the new actual controller shareholders.
Semiconductor giant Ziguang group also announced bankruptcy reorganization due to high debt. On July 10, 2021, Unisplendour Corporation Limited(000938) , Unigroup Guoxin Microelectronics Co.Ltd(002049) , Xueda (Xiamen) Education Technology Group Co.Ltd(000526) under Ziguang group disclosed that Ziguang group, the indirect shareholder of the company, was applied for reorganization by creditors. Six days later, Beijing No. 1 Intermediate People’s court ruled to accept the reorganization application of relevant creditors for Ziguang group, and designated the liquidation group of Ziguang Group Co., Ltd. as the manager of Ziguang group. According to the restructuring plan, taking June 30, 2021 as the appraisal base date, the audited and investigated liabilities of seven restructuring enterprises such as Ziguang group exceed 150 billion yuan.
“In recent years, the acceptance of market subjects for bankruptcy reorganization has gradually increased, and hundreds of billions or even trillions of debts have emerged.” An investment bank executive of a securities firm in the North said that if the enterprise debt can be resolved through bankruptcy reorganization, it can not only make the enterprise get out of its difficulties and turn “danger” into “opportunity”, but also resolve the financial risks of the industry or region to a certain extent and realize greater social value.
In addition to the magnitude of debt, the number of companies seeking rebirth through bankruptcy reorganization is also increasing.
Statistics show that in 2021, there were 43 A-share companies involved in bankruptcy reorganization, including 25 listed companies that started bankruptcy reorganization, 17 controlling shareholders of listed companies that started bankruptcy reorganization, and one listed company that decided to implement bankruptcy reorganization for participating companies.
For the intensive emergence of bankruptcy and reorganization, the above-mentioned people analyzed that, first, affected by the financing environment, some listed companies could not continue to rely on high leverage for rapid expansion, thus falling into the dilemma of being unable to pay interest and debt, resulting in financial crisis of listed companies; Second, due to the impact of economic adjustment and epidemic situation, the income or profit of some enterprises’ main business has declined, the transformation is unfavorable, and the risk accumulated for a long time has accelerated exposure; Third, the policy level supports qualified listed companies to resolve the debt crisis through bankruptcy reorganization.
smooth channel
15 listed companies were reborn within one year
Among the many companies applying for bankruptcy reorganization, there are many once famous enterprises, such as Kangmei Pharmaceutical Co.Ltd(600518) .
On November 26, 2021, the court approved the reorganization plan of Kangmei Pharmaceutical Co.Ltd(600518) . According to the plan, a total of 8.889 billion shares were transferred from the company’s capital reserve, of which 1.266 billion shares were used to solve the problem of capital occupation; 1113 million shares were distributed to minority shareholders; 2.879 billion shares were conditionally transferred by the restructuring investors. The cash consideration paid by the restructuring investors as one of the conditions for the transfer of shares was specially used to pay restructuring expenses, pay off debts and supplement the company’s working capital according to the restructuring plan; 3631 million shares will be used to pay off the company’s debts in the form of debt repayment.
In December 2021, Kangmei Pharmaceutical Co.Ltd(600518) ushered in the “White Knight”. It is disclosed that Guangdong Shennong enterprise management partnership and four financial investors have paid a total of 6.5 billion yuan and obtained Kangmei Pharmaceutical Co.Ltd(600518) 4145 million converted shares. The former obtained 3.509 billion converted shares, accounting for 25.3% of the total share capital. On December 29, 2021, the intermediate people’s Court of Jieyang City, Guangdong Province ruled that the implementation of the Kangmei Pharmaceutical Co.Ltd(600518) bankruptcy reorganization plan was completed and the reorganization procedure was terminated. So far, Kangmei Pharmaceutical Co.Ltd(600518) bankruptcy reorganization has achieved the goal of reorganization on schedule and closed the case.
According to the information statistics of Shanghai Securities News, 15 listed companies have completed self rescue through bankruptcy reorganization in 2021.
On December 31, 2021, HNA Group announced that as of that date, Hainan Airlines Holding Co.Ltd(600221) , Hna Infrastructure Investment Group Co.Ltd(600515) and Ccoop Group Co.Ltd(000564) 3 reorganization plans of listed companies had been implemented and confirmed by the court. Previously, on October 31, 2021, the reorganization plan of HNA Group was approved.
And Fujian Start Group Co.Ltd(600734) . In June 2020, due to two consecutive years of losses and negative audited net assets in 2019, Shida group was warned of delisting risk by the exchange. Seeing that the performance loss could not be reversed, in February 2021, Fujian Start Group Co.Ltd(600734) announced the start of bankruptcy reorganization. Fortunately, the company welcomed the ownership of local state-owned assets through reorganization. According to the company’s disclosure on December 6, 2021, big data company under Fujian state-owned assets will act as an investor in the restructuring industry and transfer about 545 million shares with RMB 900 million; The new controlling shareholder big data company also promised to inject Nebula big data with a shareholding ratio of 84.25% into listed companies.
“Compared with the difficulty of accepting in previous years, the prescription for bankruptcy reorganization has been greatly improved.” According to a number of investment bankers interviewed by reporters, in recent years, with the change of the judicial environment, the continuous improvement of the legal system and the establishment of professional institutions, the channel of bankruptcy reorganization has been relatively smooth, and the reorganization progress of relevant listed companies has been accelerating.
According to the statistics of Shanghai Securities News, of the 25 listed companies applying for bankruptcy reorganization in 2021, 18 have been accepted by the court. In contrast, 15 and 7 companies were accepted by the court in 2020 and 2019.
three thresholds
promote efficient treatment of venture enterprises
Not all venture companies can get rid of their burdens and regain their vitality through bankruptcy reorganization.
According to the reporter’s statistics, in 2021, the reorganization applications of four listed companies were not accepted by the court, namely Tempus Global Business Service Group Holding Ltd(300178) , Dynavolt Renewable Energy Technology (Henan) Co.Ltd(002684) , Zhengzhou Sino-Crystal Diamond Co.Ltd(300064) , Huaxun Fangzhou Co.Ltd(000687) . However, only Longli biology was not accepted by the court in 2020, and the company was delisted in June 2020.
“Listed companies must have the value to be saved, such as industries whose main business is at sunset or overcapacity, loss of core teams, etc., which will eventually be eliminated.” Yang Guanghua, vice president of Beijing boxing Securities Investment Consulting Co., Ltd., said that if the major shareholders of listed companies and their related parties have illegal guarantee problems and there is no feasible solution, such bankruptcy reorganization will not be recognized.
Take Huaxun Fangzhou Co.Ltd(000687) as an example, the company conducted pre reorganization on July 29, 2021, and then on October 24, Huaxun Fangzhou Co.Ltd(000687) announced that the creditors’ application for reorganization of the company had been rejected by the Shenzhen intermediate people’s court. Shenzhen intermediate people’s court believes that after Huaxun Fangzhou Co.Ltd(000687) appeared the illegal guarantee, it failed to put forward a practical and feasible scheme for the illegal guarantee and was approved by the CSRC for a long time, and the matter could not be effectively solved in the process of pre reorganization. Therefore, the bankruptcy reorganization application submitted by creditors shall not be accepted, and the pre reorganization procedure shall be terminated simultaneously.
In October 2020, the opinions on further improving the quality of listed companies issued by the State Council stressed that if a listed company implements bankruptcy reorganization, it should put forward practical plans to solve the problems of fund occupation and illegal guarantee. This means that it has become a necessary prerequisite for listed companies to implement bankruptcy reorganization to put forward practical plans for illegal guarantee and fund occupation and submit them to the CSRC for approval.
In addition to focusing on repairing the two hard injuries of illegal guarantee and fund occupation, obtaining the “no objection letter” issued by the CSRC has also become a key element in accepting bankruptcy reorganization.
On December 15, 2021, Tempus Global Business Service Group Holding Ltd(300178) successively issued two announcements: the controlling shareholder’s application for reorganization by creditors was not accepted by the court and the company’s application for reorganization was not accepted by the court. Shenzhen intermediate people’s court ruled not to accept the application for bankruptcy reorganization proposed by Tempus Global Business Service Group Holding Ltd(300178) ; In addition, in view of the low reorganization value and feasibility of its controlling shareholder tengbang group, starting the reorganization procedure is not conducive to the protection of creditors, and the reorganization application put forward by the controlling shareholder tengbang group will not be accepted.
For the reason why it was not accepted, the Shenzhen intermediate people’s court gave the reason that the CSRC is responsible for the supervision and administration of stock trading and Tempus Global Business Service Group Holding Ltd(300178) should obtain a no objection letter issued by the CSRC when applying for bankruptcy reorganization. Up to now, Tempus Global Business Service Group Holding Ltd(300178) has not obtained the no objection letter issued by the CSRC. Similarly, Dynavolt Renewable Energy Technology (Henan) Co.Ltd(002684) .
In this regard, a senior investment banker explained: “if the CSRC’s verification is successfully completed, it will issue a written reply to the listed company, commonly known as’ no objection letter ‘.” Obtaining the “no objection letter” from the CSRC has become a necessary condition for listed companies to enter the reorganization procedure according to law. On the one hand, its purpose is to effectively resolve the debts of listed companies and improve the quality of listed companies. On the other hand, it is to prevent new and hopeless listed companies from using the bankruptcy reorganization procedure to evade debts and abuse judicial and social resources.
policy blessing
reforming and returning to the origin of “saving”
At the end of the year and the beginning of the year, a number of troubled ST companies also embarked on the road of reorganization: in November 2021, * Zhongxing Tianheng Energy Technology (Beijing)Co.Ltd(600856) , Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) successively disclosed the announcement of creditors applying for company reorganization; On December 10, 2021, Tianjin Songjiang Co.Ltd(600225) under reorganization conducted the third public auction of its 99.80% property share of Songjiang wealth; On the first day of 2022, Citic Guoan Wine Co.Ltd(600084) disclosed that the controlling shareholder of the company was applied for reorganization
ST company is the “main force” of bankruptcy reorganization market. From the announcement of intensive disclosure, many ST companies hope to realize redemption and rebirth through bankruptcy reorganization. According to statistics, among the 43 listed companies involved in bankruptcy reorganization, the number of ST companies reached 32, accounting for nearly 80%.
Taking the former “world duck king” Henan Huaying Agricultural Development Co.Ltd(002321) as an example, on December 22, 2021, the company announced that the reorganization plan was approved by the court. According to the reorganization plan, the company will conditionally transfer the capital stock (about 1.067 billion shares) converted from the provident fund to the reorganization investor Shanghai xinxingding Asset Management Co., Ltd., which is an innovative platform specializing in the custody operation of physical assets, and the controlling shareholder is New Hope Liuhe Co.Ltd(000876) group. As of December 31, 2021, the manager has received 755 million yuan of restructuring investment, and the restructuring investment has been paid in full. In addition, Shanghai xinxinding or its designated entity also promised to solve the problem of non operating capital occupation of the company’s controlling shareholders and provide financing support after reorganization.
The successful completion of bankruptcy reorganization of listed companies is inseparable from the protection of policies.
On January 4 this year, the Shanghai and Shenzhen stock exchanges respectively issued the guidelines on self discipline supervision of listed companies of Shanghai Stock Exchange No. 13 – bankruptcy reorganization and other matters (Exposure Draft) and the guidelines on self discipline supervision of listed companies of Shenzhen Stock Exchange No. 14 – bankruptcy reorganization and other matters (exposure draft) (hereinafter collectively referred to as the guidelines), The whole process of bankruptcy reorganization of listed companies has been standardized, and the flickering reorganization has been resolutely “lit the sword”.
The guidelines further strengthen the requirements for information disclosure and ensure the transparency of the whole process of reorganization. If the disclosure of the main contents of the reorganization plan is required to be advanced to the notice of the creditors’ meeting, the full disclosure of the reorganization plan shall be advanced to the approval of the creditors’ meeting. In view of the market focus issues such as the low share price of restructuring investors, the guidelines also stipulates that if the share transfer price is lower than 80% of the closing price of the company’s shares on the date of signing the investment agreement, it is required to hire a financial consultant to express special opinions and disclose the rationality of the price and pricing basis.
In practice, the equity lock-in period set for restructuring investors is also different, leaving arbitrage space for some financial investors. The guidelines specify that if a reorganization investor becomes the controlling shareholder or actual controller after acquiring the shares of a listed company, it shall promise to lock up for 36 months from the date of acquiring the shares, and the lock up period of other reorganization investors is 12 months. If there is no change in the controlling shareholder or actual controller of the listed company, the controlling shareholder or actual controller shall promise to lock up for 36 months from the date of completion of the implementation of the reorganization plan.
“In recent years, bankruptcy and reorganization cases of listed companies have increased, but there is a lack of special norms for bankruptcy and reorganization of listed companies. The guidelines issued by Shanghai and Shenzhen stock exchange this time” It is a timely measure to effectively perform regulatory responsibilities and protect the interests of minority shareholders. It can further optimize the self-discipline regulatory rule system of listed companies and effectively protect the interests of listed companies, creditors and minority shareholders. ” Some market analysts have commented that the guidelines have systematically promoted the standardized operation of bankruptcy reorganization.
Some insiders believe that supporting listed companies to carry out bankruptcy reorganization in accordance with the law is an important embodiment of the structural reform on the supply side of capital market services and helps to give better play to the resource allocation function of the capital market. In addition, under the background of policy guidance, changes in the judicial environment and continuous improvement of the legal system, bankruptcy reorganization will return to the origin of “rescue”, and the road of enterprise bankruptcy reorganization will be more transparent, fair and smooth.
