Asia'S Largest PTA Production Company, Hualian Three Xin Sink Bankruptcy Dilemma

Zhejiang, China, October 13, in this season, Shaoxing county has been a shocking "bankruptcy wind". The collapse of the local giant enterprises: the largest local enterprise, the largest Zhejiang in Asia, the world's second production capacity of the PTA Hualian three Xin Petrochemical Co., Ltd. and the largest textile printing and dyeing enterprise in China Zhejiang Jiang long Holding Group Co., Ltd. has been taken over by the government, the future is uncertain.

Among them, the list of Hualian three Xin's shareholders includes Hualian Holdings (000036) of listed companies and controlling shareholder of Huaxi Village (000936) and Jiangsu Huaxi Group Company, a famous township enterprise.

Jiang long holdings is the actual holder of China's printing and dyeing of Singapore listed companies.

Yesterday, a local well-informed source in Shaoxing told the daily business reporter that vice president Zhou Zhen Min of Hualian three Xin has been controlled by the police, while Sun Liyong, another shareholder of the company and chairman of Zhejiang Gabriel Holdings Group Limited, lost contact. Unconfirmed news that he had gone abroad.

Hualian three Xin futures?

News about Hualian three Xin originated from the futures market.

Hualian three Xin's main business is PTA, PTA is a chemical raw material, extracted from crude oil through a series of processes, mainly used in the manufacture of polyester and other chemical products.

China is now the world's largest consumer market for PTA. Last year, China's PTA production was 5 million 500 thousand tons, and its consumption exceeded 10 million tons. It is estimated that by 2010, the demand will reach 17 million tons.

In December 18, 2006, the futures of benzene two acid futures listed on the Zhengzhou Mercantile Exchange was the world's first PTA futures variety.

Hualian three Xin in September this year to counter the trend to do more, at a high price to receive a huge volume of 150 thousand tons of spot futures firm, involving at least 1 billion yuan of funds.

If the price is calculated according to the current spot price, the loss will be close to 500 million yuan.

According to analysis, Hualian three Xin do more is hoping to create a tight spot situation, take the opportunity to change the trend of PTA prices, reshape market confidence.

"In the PTA809 contract, the wrong positioning and the tendency to do more are the fundamental mistakes made by Hualian three Xin.

Besides, the mentality of a gambler who is desperate and willing to fight will help.

For a large margin of nearly 500 million of futures trading, a futures practitioner said so.

Liu Wenwang, an analyst with Yongan futures energy and chemical industry, told reporters in the daily Commercial Daily that it is not wrong for the production enterprises to enter the futures market to hedge and hedge themselves. "Other enterprises in the industry also have futures trading in designing PTA, but the idea of Hualian three Xin's operation is a bit unusual."

Rumors of shareholder disputes

In another version of the story, the story is more "Jianghu".

Rumors that Mr. PTA, a Hualian three Xin company as a PTA manufacturing enterprise, and a wealthy Xiaoshan tycoon, have reached an agreement in the futures market.

Mr. Q is in charge of pushing the warehouse and doing more PTA809 to pull the price up.

And because of the large quantity of Hualian three Xin's stock, a large number of entering the market will inevitably impact the market price, so Hualian three Xin agreed to put the price of not less than Mr. Q into the market.

"Since the price has been pulled up, putting the market at a higher price is good for Hualian three Xin."

A person in the futures industry who did not want to be named revealed to the daily business reporter that "such products of Hualian three Xin can basically be sold out, regardless of the order quantity or market demand, it will be able to digest its output."

It is said that the two have also issued a 20 million penalty.

"Which side will default, 20 million will be gone."

However, the market did not follow the two wishful thinking.

Since last December, the PTA industry has entered a downward cycle, and prices have gone down all the way. "Finally, the three Xin Lian Xin has no choice but to go out because of tight funds."

"Hualian three Xin serious loss situation in the industry has already been made public."

The chief executive of Xinghui Chemical Fiber Group Co., Ltd., located in Xiaoshan, told the daily business reporter that "this crisis is going to erupt sooner or later."

Xinghui chemical fiber in the "chemical fiber heavy land" Xiaoshan is also ranked among the top enterprises.

Another market participant guessed that the three crisis of Hualian was due to the fact that the funds of the enterprises themselves were very tight, that the banks might have problems with their loans, and that the other might be the smoke bombs of the enterprises themselves.

"Large shareholders are likely to take up capital, resulting in tight funds, and the contradictions between shareholders are becoming more and more intense. They can not be solved in private. They can only seek outside world, or they want to remove obstacles and contradictions in a fast and effective way."

Three local giants are involved.

In the Hualian three Xin holding list, the listed company hualian holdings was once the largest shareholder.

According to the 2007 annual report of Hualian holdings, by the end of that year, the total assets of Hualian three Xin were 10 billion 987 million yuan.

At present, its largest shareholder has changed to Huaxi Group. Its listed company, Huaxi Village (000936), belongs to the chemical fiber manufacturing industry, accounting for 37.08%; Hualian Holdings 26.44%, the second largest shareholder.

The other two shareholders are Shaoxing's famous business outlook group and Gabriel group, accounting for 19.02%.

At the same time, we look forward to Tang Limin, chairman and legal representative of the board of directors of the group. He is also president of the three Xin Lian of Hualian.

Hualian holdings semi annual report shows that once the Hualian three Xin bankruptcy, Hualian holdings largest theoretical account loss will be around 870 million (of which long-term equity investment net worth 310 million, other receivables 20 million, guarantee 540 million).

The undistributed profit of Hualian holdings is only 138 million, which is attributable to 1 billion 560 million of the parent company's interests. If calculated according to the theoretical book loss of 8.7 billion, the company's net assets will shrink dramatically and will face huge losses.

Hualian holdings semi annual disclosure of net assets per share is only 1.39 yuan, earnings per share -0.05 yuan, if Hualian three Xin bankruptcy, Hualian holdings may fall into a dilemma for two consecutive years.

The semi annual report also shows that the guarantee amount provided by Hualian holdings for Hualian three Xin is 543 million 150 thousand yuan, of which the Huaxi Group's anti guarantee amount in Jiangsu is 122 million 400 thousand yuan, and the local Shaoxing Seiko Construction Group's counter guarantee amount is 420 million 750 thousand yuan.

Once Hualian three Xin enters bankruptcy procedures, the two companies will be involved.

Due to the complexity of the definition of rights in the guarantee and counter guarantee, there are uncertainties in determining how many guarantees will be faced. Therefore, the maximum loss is simply calculated according to the maximum loss.

Outlook Group, Gabriel group and Seiko construction group are located in Yang flood bridge, Shaoxing, one of the largest enterprises in Shaoxing.

Among them, the Outlook Group's "prospect shares" and the "Wing Lung industry" of Gabriel group have been listed in Hongkong.

Seiko Construction Group's holding Seiko technology (002006), light textile city (600790) and Changjiang Seiko (600496) three listed companies.

The provincial government has helped.

According to the materials reported to the government by three Xin Xin, the credit risk exposure is 7 billion 282 million yuan, including short-term loans of 1 billion 986 million yuan, long-term loans 1 billion 950 million yuan, letters of credit 1 billion 717 million yuan, and the rest as acceptance bills.

However, according to a local bank of China, a reporter told reporters that the number of specific liabilities is unclear.

There are more than three creditor banks in Hualian Xin Xin, most of which are ICBC, and ICBC has sent a working group to the local area.

"Our bank has about 2 billion yuan."

Another bank official said that the amount was only above average in these creditor banks, and "more."

It is understood that bank of China, Minsheng Bank, agricultural bank, China Merchants Bank, Shanghai Pudong Development Bank and Shenzhen Development Bank all lend to Hualian three Xin.

Another special case is that Hualian three Xin's loans are mostly provincial branches.

"The bank's loan to Hualian three Xin is Shenzhen branch and Zhejiang branch. ICBC and Minsheng Bank are direct loans from provincial branches."

In addition, it was reported that the Zhejiang provincial government held a relevant meeting yesterday, requiring banks to return to the end of 2007 by Hualian three Xin loan.

It is also rumoured that the Huaxi Group will take up three Hualian. Yesterday afternoon, the business daily telephoned the Huaxi Group and the listed company Huaxi Village. Both sides said that the current situation was uncertain and inconvenient to comment.

Jiang long controls loan to Huaxi Village.

Compared with Hualian's three Xin's government aid, once China's "printing and dyeing one brother" Jiang long holdings fled with the boss and the landlady, the situation seemed to be even worse.

Because Jiang long Holdings has a lot of private lending, it is located at the headquarters of Shaoxing Keqiao Economic Development Zone, where people gather to collect debts every day.

The pay team once caused traffic jams.

According to local sources, the staff salaries, suppliers' loans, private lending, bank loans and some hidden holes of Jiang long holding company may have been insolvent. Only the two companies of Jiang long holding, Zhejiang Jiang long textile printing and dyeing Co., Ltd. and Zhejiang Southern science and Technology Co., Ltd., the liabilities reached nearly 1 billion 100 million yuan, plus the amount of loans owed by private providers and suppliers, the amount has roughly 1 billion 600 million yuan, and if combined with some external guarantees and other debts, the amount is far more than 2 billion 500 million yuan.

"Jiang long Holdings has already started large-scale private lending."

A local dyeing and printing company owner who had contacted Tao Shoulong, Jiang long holdings, told reporters.

Tao Shoulong is said to have borrowed almost all the well known places in China.

He borrowed hundreds of millions of dollars from Huaxi Village, Jiangsu.

Because it is Jiangsu people, there are also some connections in the locals.

In Keqiao, Shaoxing, the rumor has it that the most person has more than 100 million yuan to lend to Tao Shoulong.

At present, the "China printing and dyeing" of Jiang long holdings listed in Singapore has issued a notice in Singapore at 14:20 on 8 local time, asking the company's stock to suspend trading for 1400 hours, the specific reason for the follow-up announcement.

The Singapore Exchange's trading quotas showed that the shares were priced at $0.025 before the suspension in October 8th.

Compared with the original issue price of the company, the stock price has dropped more than half. In September 7, 2006, China's printing and dyeing was officially listed on the main board of Singapore, issuing 113 million shares, issuing price of 0.27 yuan / share, on the same day, the stock opened at 0.40 yuan / share.

According to the latest news, Tao Shoulong has been under police control in Ningbo and has not revealed whether his wife, Yan Qi, is under control.