Taihe'S "Leading The War" Is Coming To An End: Vanke Or The Latecomer Has Been Negotiating For More Than Two Months

All kinds of signs indicate that the work of "introducing strategic investors" of Taihe Group for many days is coming to an end. Recently, it is said that Vanke's shareholder may become a new one.

As early as early as may this year, Taihe and Vanke had already started contact and expressed their willingness to cooperate, according to the 21st century economic report. Since then, the company has always been involved in other work. Up to now, the two sides have had many rounds of consultations in Shenzhen and Beijing, and the negotiations are progressing smoothly on the whole, and the inventory of Taihe project has also been conducted for several rounds.

Some market participants said that although there are still variables, Vanke is the closest enterprise among the numerous participants to reach a cooperation with Taihe.

So far, neither company has made a public response to this. However, according to the latest announcement, Taihe defaulted on bonds for the first time in the near future, which seems to highlight the urgency of "leading the war". As of July 7, the company's outstanding debts were 27.065 billion yuan. The total debt due in 2020 is RMB 55.5 billion.

It is urgent for the new shareholders to become the owners.

"Twists and turns" in history

Taihe announced the introduction of strategic investors in May this year. On the evening of May 13, Taihe Group announced that the company's controlling shareholder, Taihe investment, was planning to introduce strategic investors into the company, and the relevant transactions may lead to the change of control right of the company.

The news, like a heavy bomb, quickly attracted market attention. But if we sort out the past, there are traces for Taihe to follow.

As a result of strategic misjudgment, Taihe obtained a number of high-priced land in 2017, but the property market entered a period of deep adjustment in 2018. In addition, some project demolition was not smooth, and the sales of Taihe were frustrated, and the fund problem gradually surfaced.

In order to recover the funds, from the end of 2018 to 2019, Taihe Group has successively sold more than ten high-quality projects, with a total payment of more than 10 billion yuan.

In 2019, the net debt ratio of Taihe Group is 243.76%, with a decrease of about 140%; the asset liability ratio is 84.88%, with a decrease of about 2%. However, in the industry, the debt ratio of Taihe still exceeds the safety "red line", and the total debt scale is still as high as 190 billion yuan.

According to the 21st century economic report, as early as 2019, a head of real estate enterprise had contacted with Taihe and explored the possibility of becoming the owner. However, as Huang Qisen, chairman of Taihe Group, did not want to give up control, the two sides failed to negotiate.

The equity structure of Taihe Group is relatively simple. As of the first quarter of this year, Taihe's shareholder controlled Dahuang. Mrs. Huang Qisen, Ye Li, holds 12.05%, while Huang Qisen's sister Huang Min holds 1.52%. The three are persons acting in concert, holding 62.54% of the shares of Taihe Group. Therefore, Huang Qisen has absolute right to speak in Taihe.

In 2020, the net profit of Taihe was only RMB 0.79 billion due to the impact of the outbreak of pneumonia. In April and may, Huang Qisen was twice listed as the person who was executed because of the overdue of two loans.

This also made Huang Qisen determined to let go. In recent months, many enterprises have been involved in the "lead war" of Taihe.

According to the 21st century economic report, Xiamen international trade once became the closest partner to Taihe in war and investment with the mediation of Fujian Province. Last year, the revenue scale of Xiamen International Trade exceeded 200 billion yuan, and its main business included real estate, which was in line with the business of Taihe. However, because of the huge debt scale of Taihe, the world's top 500 enterprise finally chose to give up.

Xiamen Jianfa, China railway construction, poly and other enterprises have also had contact with Taihe, but the final negotiation failed. The 21st century economic report has learned that although it has a good eye on the product strength and regional layout of Taihe, the debt scale of Taihe is too large and the asset quality is relatively poor, which has become an important reason for these enterprises to give up. On the other hand, the above-mentioned "state-owned" enterprises also have the problem of long decision-making cycle, which can not meet the urgent requirements of Taihe for partners.

In addition, there are many enterprises trying to seek project level acquisition, but this is not in line with the current strategy of Taihe.

In contrast, Vanke is the latest negotiator to be exposed. According to the reporter's understanding, although there are small obstacles in the negotiation between the two sides, the overall situation is relatively smooth. And from the attitude of the management of Taihe, it seems that it is quite in favor of Vanke.

Although Taihe claimed in the announcement on July 7 that the introduction of strategic investors is still in the planning stage, "there is still uncertainty whether it can be signed or not". However, from the comprehensive information of all parties, Vanke is the enterprise closest to the cooperation with Taihe.

Debt pressure or catalyst

In recent days, the debt default of Taihe seems to highlight the urgency of "leading the war".

On July 6, the Shanghai Clearing House announced that the medium-term note "17 Taihe mtn001" of Taihe Group had breached the contract. The bond was issued on July 5, 2017, with a line of 1.5 billion yuan, an annual interest rate of 7.5%, and a maturity of 3 years. At the same time, the default triggered the cross protection clause, resulting in the early redemption of another bond "17 Taihe mtn002" due on September 19. The principal and interest of the two bonds together exceeded 3.7 billion yuan.

This is the first time that Taihe has defaulted on bonds. As for the reasons for the default, Taihe Group said, "affected by the overall environment of the real estate industry, the new crown pneumonia epidemic and other superimposed factors, the company's existing project de turnover rate has decreased in the short term, and the sales expectations fluctuate; at the same time, due to the company's own large debt scale, high financing costs, debt concentration and other issues, the company's short-term liquidity is difficult. After many efforts to raise funds, the company still failed to complete the timely cashing of 17 Taihe mtn001. "

The credit rating of Taihe International Co., Ltd. was lowered for two consecutive times on July 3. The main credit rating of Taihe Group has been lowered from AA - to C, and the credit rating of 16 Taihe 02 and 16 Taihe 03 bonds has also been lowered to C.

In response to the inquiry letter of the annual report of 2019 on July 7, Taihe also disclosed another set of data. As of July 7, the company's outstanding debts were 27.065 billion yuan. The total debt due in 2020 is RMB 55.5 billion.

An analyst familiar with Taihe believes that these pressures will force the early completion of the work. On the one hand, the debt pressure is becoming increasingly prominent, and Taihe is in urgent need of financial support; on the other hand, with the epidemic situation under control, the real estate market is recovering rapidly, and the changes in equity level need to be settled as soon as possible, which will help the company to stabilize its morale and use new funds to quickly leverage the existing resources.

According to the annual report, by the end of 2019, Taihe's soil storage reached 32.7014 million square meters, with a sales value of about 400 billion yuan.

For the above-mentioned people, there is no appeal of small-scale property analysis. However, honey or arsenic will largely depend on the ability and willingness of the "white Samurai". At present, there are not many enterprises capable of winning Taihe, which also makes the work of leading the war easier. As the situation is urgent, it will soon be known whether the largest M & A in the history of China's real estate will take place in the near future.

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