4.5 Billion Debt: Blue Light Dilemma To Be Solved

Blue light, which is deeply in debt, is still trying to find "knight in white".

The 21st century economic report confirms that under the mediation of government departments, Blu ray is seeking debt restructuring and equity transfer, and has contacted some companies and institutions, including state-owned holding enterprises. But because of the complexity of the debt problem, it will take time for things to settle.

Prior to this, the market had heard the news that Sichuan development, a state-owned enterprise in Sichuan Province, intends to take a stake in Blu ray. However, according to the reporter's understanding and verification, due to various reasons, the cooperation between the two sides has been temporarily suspended.

Rongchuang, Vanke, China Resources, overseas Chinese city and other real estate enterprises have also spread the news of cooperation with Blu ray. The 21st century economic reporter has learned from many sources that Vanke is the only one that has made progress. The latest progress of Vanke's acquisition of Blu ray is the Chengdu Tianfu Black Diamond project, and the two sides are currently going through the handover procedures. Tianfu black diamond is the top product of Blu ray in Tianfu new area, which is positioned as a luxury house. This project has become one of the best quality assets of Blu ray. Previously, Blu ray has sold a number of its projects to Vanke and obtained a sum of money.

As for whether Vanke will adopt the cooperation mode with Taihe and invest in shares in the capacity of war investment, according to people familiar with the matter, the possibility of Vanke becoming a shareholder of Blu ray is relatively low, and the cooperation between the two sides may be limited to the project level.

In terms of the internal progress of Blu ray, the above-mentioned insiders told reporters that the financing department is actively communicating with creditors to seek debt rollover. As for the news that the Shanghai headquarters was abolished, the reporter learned that the Shanghai headquarters will still be retained, but the main jobs will be financing and administration, and the rest of the staff will be withdrawn from the Chengdu headquarters. At present, the impact of the debt problem still exists. For example, Blu ray once had a round of "personnel optimization".

Yang Keng, the actual controller of Blu ray, is also actively helping himself. Recently, Yang Keng emptied his direct shareholding in Blu ray group, and elected his son Yang Wuzheng as chairman and president. Liu Yingnan, a lawyer from Beijing Huatian law firm, who is deeply involved in the company law, analyzed to the reporter that this is just for the purpose of preserving the decision-making power to a greater extent, realizing the role transformation from shareholder to creditor, and contributing to the company's future development.

According to Blu ray development announcement, as of July 12, 2021, the company's accumulated principal and interest of debts due and unpaid totaled 4.544 billion yuan. Although the scale of default is not large, the possibility of further expansion of the gap is not ruled out.

The wind starts at the end of the green duckweed, but the internal cause has already covered the pulse for thousands of miles.

From the "Sichuan first brother" and a hundred billion black horse, to the top of default and the cliff like decline of rating, Blu ray has deeply reminded similar real estate enterprises to carefully grasp the two double-edged sword of expansion strategy and land selection, otherwise, they will not be able to achieve greater development, and the company itself will be dragged into the abyss.

domestic trouble and foreign invasion

On the evening of July 5, Blu ray development announced that Chi Feng, the president and Ou Junming, the chief financial officer, resigned because of the "overall arrangement of the company". Chi Feng, who has been in China Resources Land for 20 years, has only one and a half years in Blu ray.

For more than a year, Blu ray management personnel turbulence. In April 2020, Zhang Qiaolong resigned as vice chairman and president; At the same time, Wang Wanfeng resigned from the vice president; In November 2020, Meng Hongwei resigned as a director; In February 2021, Yu Chi, executive vice president and chief operating officer of Blu ray development, who has worked in Blu ray for 12 years, resigned; In April 2021, he Jianbiao, vice president of investment, who is also a veteran of Blu ray, resigned.

In real estate enterprises, such a high-level management in a short period of time, it is rare. The large-scale change of executives in a short period of time will affect the direction selection, implementation and continuity of corporate strategy.

The change of management is only one aspect of Blu Ray's problems. The company's debt default, equity freeze and rating agency's Cliff style downgrade followed.

According to public information, from January to February 2021, Blu ray has pledged its controlling shareholders' equity for four times. As of the end of February, the cumulative proportion of shares pledged by controlling shareholders Blu ray group and Yang Keng reached 61.76%.

On February 26, Blu ray announced that it would sell its listed property company Blu ray Garbo to country garden for 4.846 billion yuan. At that time, there was speculation that Blu Ray had encountered a liquidity crisis.

Since May, since Moody's lowered the Blu ray rating, rating agencies such as Dagong, zhongchengxin international, standard & Poor's and Dongfang Jincheng have continuously lowered the Blu ray rating. The vicious circle of limited external financing and rating downgrade has begun.

As of July 14, Dagong adjusted the main credit rating of Sichuan Blue Light Development Co., Ltd. to C; S & P's global rating downgraded Blu Ray's long-term main credit rating from "CCC -" to "d".

S & P said it expected Blu ray development to default in full in view of the company's extremely weak liquidity situation and did not expect to pay back the RMB 3.3 billion domestic bonds due in the next three months.

China integrity International believes that the company will have about 4.5 billion yuan of domestic bonds (including rights calculation) due in 2021, of which 2.7 billion yuan of bonds will mature or be sold back in July. At present, the company has limited available monetary funds. It is very unlikely that funds will be allocated from subordinate project companies to repay the debts of the company, and liquidity pressure is great.

Since June, Blu ray has been frozen in succession. As of July 8, the controlling shareholder of Blu ray development, Blu ray group and its acting in concert, Yang Keng, have been frozen about 529 million shares, accounting for 30.76% of its shares and 17.45% of its total share capital; As of July 6, Blu ray group passively reduced its 1.59% stake in Blu ray development.

Until July 12, the blue light first cash bond defaulted, and the accumulated principal and interest of the debt due on that day totaled 4.544 billion yuan.

The financial situation of Blu ray itself is not optimistic. According to the data, as of June 30, 2021, the monetary fund balance of Blu ray development is 11.016 billion yuan, of which only 207 million yuan is freely available.

The task of raising debt repayment funds is heavy and time is tight.

The way of self rescue of actual controller

White knights are hard to find.

In the real estate enterprise profit margin and operating cash flow are tight at the moment, whether the comer is a white knight also needs to be screened.

Rongchuang, Vanke, China Resources and overseas Chinese city have not made any progress in strategic investment, but news of Vanke's acquisition of Blu ray project company has been constantly emerging. In late May, 53.17% of the equity of Wuxi Hejun Real Estate Co., Ltd., a subsidiary of Blu ray, was transferred to Changzhou Vanke. The total amount of land acquisition corresponding to the four items in the asset package may be about 3-3.5 billion yuan; In late June, Bluelight Wenzhou Xinlan Real Estate Co., Ltd. was acquired 100% equity by Vanke, involving 2.065 billion yuan of Ningbo Haishu plot in the asset package; On June 30, Blu ray development sold two projects in Shijiazhuang and Chongqing to Vanke, with transaction consideration of about 500-600 million yuan.

However, according to the public information, Blu ray paid a premium rate of 99.75% for the Shijiazhuang project in 2020, with a transaction amount of 793 million yuan. The price sold to Vanke was greatly discounted.

The 21st century economic report reporter learned that the latest progress in the project level transaction between Blu ray and Vanke is the blue light Tianfu Black Diamond project located in Chengdu Tianfu new area. The reporter confirmed from the project side that Vanke and Blu ray are indeed in the process of handover, and the project will be operated by Vanke. According to the data, the total construction area of the blue light Tianfu Black Diamond project is about 107900 square meters, including 175 square meters to 253 square meters.

According to people close to Vanke, Vanke's willingness to become a shareholder is not strong. At present, Vanke's frequent acquisition of Blu ray projects reflects that it is unlikely to become a shareholder. After all, after all, the value of Blu ray will be further weakened after selling high-quality projects.

"If Vanke becomes a shareholder at this time, the first thing it will face is to inject sufficient cash flow for relief. Their short-term cash flow pressure will increase sharply. The acquisition of Blu ray project can further increase Vanke's land reserve, which is in line with the company's long-term development goals." Liu Yingnan said.

In addition to selling the equity of the project company, Yang Keng himself is also actively planning.

On June 1, Yang Keng transferred 169 million shares to Blu ray group, accounting for 5.58% of the company's total shares. After the adjustment, the group holds 58.31% of the shares of Blu ray development, and Yang Keng holds 95.04% of the shares of Blu ray group.

For Yang Keng's move, Liu Yingnan analyzed that "there is still a deeper intention, that is, to realize the role transformation from shareholder to creditor. In this way, when Blu ray development is faced with a position explosion in the future, and even seeks the judicial protection of bankruptcy and liquidation in the next step, he can participate in the bankruptcy and liquidation procedures of the company as a creditor."

According to his introduction, in the company law, shareholders only enjoy the remaining equity of the company, which is reflected in the financial statements as the owner's equity. When the company's liabilities are greater than its assets, the owner's equity is negative, and shareholders can't realize the shareholders' equity in essence. On the contrary, creditors are different. Large creditors like Yang Keng, who have corporate debt, play an important role in the bankruptcy and liquidation of the company, which will determine the future development trend of the company.

Liu Yingnan said that the corporate shareholding mode is more conducive to the stability of the company's equity structure. The centralized use of equity is conducive to unified management and decision-making. In the turbulent period of the company's development, it can form "one brain, one voice", which increases the convenience of coordination among all parties.

On the 4th of last month, Yang Keng resigned as the chairman of the company, and the board of directors elected Yang Wuzheng as the chairman. A month later, Yang Wuzheng was also president of the company.

"The change to his son is acceptable to shareholders and creditors." Liu Yingnan and a number of industry insiders believe that Yang Keng is only making preparations, and the role of the actual controller remains unchanged.

On July 12, Blu ray stressed in the bond default announcement that the company would formulate a short, medium and long-term comprehensive solution plan with the strong support of the local government and the active coordination of the financial regulatory agencies to actively solve the current problems.

Sequelae of high cost land acquisition

Through the heavy debt, how did the once hundred billion black horse come to this stage?

Due to a debt extension of Foshan project, Blu ray was restricted by Ping an internal financing, which caused a financing run by financial institutions, which was just the fuse.

People familiar with Blu ray believe that the most fundamental reason lies in Blu ray itself. Under the expansion strategy, the land has been aggressively invested, and the follow-up situation of the plot is not satisfactory. In addition, the diversified business is hindered and other factors.

Blue light, which has been deeply cultivated in Chengdu and Chongqing, has started its nationwide layout in 2009. In 2016, the sales volume increased from 18.37 billion yuan to 33.91 billion yuan. With Yang Keng's plan to sprint to 100 billion yuan in 2017, the data rapidly increased to 58.2 billion yuan and 85.539 billion yuan in 2017 and 2018, respectively. In 2019, Blu ray officially entered the "100 billion real estate enterprise club" with 107.98 billion yuan of sales, and set up its headquarters in Shanghai that year, pointing to the expansion of East China.

During the period of rapid development, the land acquisition of Blu ray is rising rapidly, and the premium rate is frequently high.

From 2015 to 2020, the number of land acquired by blue light development is 15, 18, 31, 85, 48 and 60 respectively.

In 2015, with a premium rate of 123.68%, Blu ray won land in Hefei high tech Zone with 16 real estate enterprises such as Vanke, poly and China Merchants; In 2016, Blu ray development acquired land in Qingdao with 997 million yuan, with a premium rate of 204%.

In 2020, the situation of land acquisition by Blu ray at high premium is more obvious. At the beginning of April, a plot in Nanyang, Henan Province was won with a total price of 847 million yuan, with a premium rate of 122.9%; At the end of April, Blu ray won another homestead in Fuyang, Anhui Province at a premium rate of 85% and a total price of 855 million yuan; In May and June, Blu ray replenished the soil reserve with 150.65% and 148.54% premium rates respectively in Nanyang and Xinyang, Henan Province.

In late August 2020, Blu ray won the first project in Shijiazhuang with another hundred rounds of fierce fighting, and the final transaction price was 793 million yuan, with a premium rate of 99.75%. The plot was sold to Vanke at a discount 10 months later.

Wind data shows that in 2020, 37 out of 52 land parcels with premium rate announced by Blu ray development will exceed 30%, of which 21 will exceed 50% and 5 will exceed 100%.

It is worth noting that under the "Shanghai + Chengdu" dual headquarters mode, Blu ray has rapidly expanded into the third and fourth tier cities in East China, and the product profitability and de marketing situation of these cities are not very optimistic.

As early as the end of 2020 when Blu ray has not exposed its liquidity crisis, some analysts pointed out that Blu ray increased its land reserve in the third and fourth tier cities, and adopted high premium and high cost land acquisition. This land acquisition behavior will face risks in the future, and the future profit situation may be under pressure. Some analysts who are familiar with Blu ray Blu ray bluntly said, "I can't understand, and I'm more scattered.".

At the same time, Blu Ray's sales increase is not ideal. In 2020, its real estate sales volume will be 103.536 billion yuan, only 2% higher than the previous year.

Under the strategy of taking advantage of the city, Blu Ray's residential product capacity and de conversion rate have been criticized.

In July 2019, Blu ray won a parcel of land with 1.084 billion yuan in Fuzhou, with a floor price of 10488 yuan / m2, but the construction proportion of residential commercial housing is as high as 80%. At the same time, there is no education and business related supporting facilities in the surrounding areas. As of the beginning of 2021, the removal rate is 37%.

On the other hand, Blu ray has also aggressively entered the cultural and tourism industry in terms of diversified development, which has precipitated funds, but there is no substantial return at present.

After the policy of "three red lines", "two centralized land supply" and "five housing loans" were introduced, the environment faced by real estate enterprises continued to tighten.

"High leverage and high turnover must focus on cash flow security." Bai Wenxi, vice president of China enterprise capital alliance, said, "it is generally believed that the era of high turnover has passed. In the future, real estate enterprises should pay attention to the safety and health of enterprise cash flow, be careful of cross regional strategic layout and capital expenditure, pay special attention to the industry environment and policy changes, and establish a rapid response mechanism of enterprises."

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