Sudden explosion of 45 billion debt, Zhejiang star enterprises to the provincial emergency!

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Sudden explosion of 45 billion debt, Zhejiang star enterprises to the provincial emergency!

2018-05-04 20:26:07 183 ℃

For the 16th consecutive year, it was listed in the “Top 500 Private Enterprises in China”. Last year, the Dunan Group, which ranked 27th among the top 100 companies in Zhejiang, suffered liquidity difficulties due to difficulties in issuing bonds.

The Dunan Group's report shows that at present, the Group’s interest-bearing liabilities exceed RMB 45 billion. “We urgently request the provincial government to coordinate and promote measures to resolve the crisis as soon as possible”.

On May 2, the Zhejiang Provincial Finance Office held a debt coordination meeting of the Dunan Group to solve the debt financing of the Dunan Group. And bank loans and other urgent issues. On the same day, Dunan's two A-share companies, Dunan Environmental and Jiangnan Chemical, simultaneously suspended their licenses.

Daily Economic News reporter confirmed from relevant departments in Zhuji City, Zhejiang Province that the debt incident of the Dunan Group was true. However, the two listed companies of the Dunan Group operate independently and have little to do with group-level debt.

The well-known Japanese companies fall into a liquidity dilemma

The Dunan Group stated in its report to the Zhejiang Provincial Government that since the second half of 2017, the market funds have been rapidly The tightening has caused Dunan Group to face problems such as difficulty in issuing debts and increasing financing costs, which has led companies to consume a large amount of their own funds and has experienced very serious liquidity difficulties.

At present, the company's various interest-bearing liabilities exceed RMB 45 billion, and most of the loans from banks and non-bank financial institutions are concentrated in Zhejiang Province. Urge the provincial government to coordinate and promote measures to resolve the crisis.

Started at RMB 900, the Dunan Group was established in Zhuji, Zhejiang Province in 1987 and has been included in the “Chinese company for nine consecutive years”. "Top 500" has been among the top 500 Chinese private enterprises for 16 consecutive years. In 2017, Dunan Group ranked 27th among Zhejiang Top 100 companies, solving 29,000 employees' employment.

According to official website and other data, Dunan Group is a company whose main business is advanced manufacturing, civil explosive chemical industry, modern agriculture, New energy, new materials, venture capital and other comprehensive enterprises, which own the Dunan environment and JiangnanChemical two listed companies. In 2017, the total assets of the Dunan Group consolidated statement amounted to 64.88 billion yuan, net assets reached 22.52 billion yuan, and the asset-liability ratio was 65.3%. The annual sales revenue was 58.61 billion yuan and total profit was 1.76 billion yuan.

In the eyes of the outside world, the Dunan Group's "debt risk" has come a bit suddenly. According to a report in the Securities Times, the person in charge of the relevant business of a trust company in Hangzhou said, "We always thought that the Dunan Group was not short of money." Jiangnan Chemical's equity held by the Dunan Group has not been pledged, and the proportion of stocks directly or indirectly held by the Dunan Environment Pledge is not high.

Previously, Dagong International's 2017 Tracking Rating Report on the Main Body and Related Debt issued by the Dunan Group in May 2017 showed that, as of May 25, 2017, there was no credit default in the Dunan Group headquarters. In the case of Dagong, Dagong maintains A-1 on the credit rating of related debts and maintains AA+ on its credit rating. The rating outlook remains stable.

The listed company has suspended its licenses.

A person from the relevant department in Zhuji, Zhejiang province told the Daily Economics reporter that the Dunan Group did experience a debt crisis. However, this has no connection with its listed company Dunan Environment and Jiangnan Chemical, and the two listed companies operate independently.

According to his preliminary understanding of the situation, because the Dunan Group’s impact on de-leverage was underestimated last year, and the company’s financing channels were relatively monotonous last year, mainly through bond financing, there were some problems. .

Daily Economic News reporter noted that Dunan Environment and Jiangnan Chemical had opened on May 2 Suspended temporarily. The suspension announcement indicated that the reason for the suspension was the existence of major uncertainties in the Dunan Group and that the matter had a significant impact on the company.

The Daily Economic News reporter stated that on May 3, the two companies received letters of concern from the SME Board and the Shenzhen Stock Exchange respectively on the issue of suspension of trading.

Jiangnan Chemical acknowledged in its reply that "Due to the impact of the macro financial environment, the Dunan-controlled bonds have not been issued on time, causing certain short-term liquidity problems." However, Jiangnan Chemical pointed out that the company and Dunan Holdings maintain their independence in terms of business, personnel, assets, organization, and finance. As of now, the company's production and operations are all normal.

In addition, Jiangnan Chemical stated in the announcement that "If Dunan Holdings cannot properly solve the debt liquidation problem, there may be changes in the company's control rights."

Request Provincial Government Coordinated Support

The current Dun An Group’s interest-bearing liabilities exceed RMB 45 billion, with the exception of 12 billion yuan in outstanding bonds. Most banks and non-bank financial institution loans are concentrated in Zhejiang Province. Therefore, if Dunan has a credit default, it will bring potential systemic risks to multiple financial institutions in Zhejiang Province.

In the appeal to the government, Dunan Group put forward three major “resolve ideas”:

Firstly, Zhejiang Zheshang Bank should come forward to increase temporary liquidity support, including the supply chain. Financial and blockchain products;

The second is Zheshang Bank, Zhejiang Jinrong, etc. to start the "Phoenix Plan" special fund as soon as possible, acquire the high-quality projects held by Dunan, activate cash flow, replace debt;

The third is to request the hosting of Shield Solar (polysilicon) and Huachuang Wind Energy (wind power equipment).

In March of last year, the Dunan Group had acquired a 82% stake in China Wind Energy from the Datang Group's base price of 2.2 times (557 million yuan).

According to the spiritual requirements of major leaders of the Zhejiang Provincial Government, including the Central Bank of Hangzhou Central Branch, the Zhejiang Banking Regulatory Bureau, the Zhejiang Provincial Development Bank, the Provincial Export-Import Bank, the Provincial ICBC, and Huarong, the Great Wall, Xinda, etc. The relevant manager of the financial asset management company attended the debt coordination meeting of the Dunan Group.

A related person told the Securities Times reporter that from the perspective of the debt maturity structure of the Dunan Group, which focuses on short-term interest-bearing debt, the company has experienced some "temporary difficulties." However, he said, "I believe that under the coordination of the Zhejiang Provincial Government, it will be better resolved."

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