Since "encountering the biggest difficulties since its establishment", Country Garden has actively taken self-help measures. In the next 12 months, ensuring delivery, operation and credit will become the three main tasks of Country Garden.
The end of the year has arrived, and Country Garden has made frequent moves, constantly sending positive signals to the market. On December 13, Country Garden Real Estate issued an announcement on the results of the buyback of "22 Bidi 02" bondholders.
According to the announcement, the principal and interest of some bonds resold by "22 Bidi 02" have been paid in full, and the effective resale amount during the resale registration period is 800 million yuan, which to a certain extent eliminates the market's concerns about the substantive default of domestic bonds.
Just today, Country Garden also announced that it would lose its equity in Zhuhai Wanda, and the net proceeds would be used for overseas restructuring.
Spend 800 million yuan to sell back "22 Bidi 02".
22 Bidi 02" is the second phase of the 2022 corporate bond issued by Country Garden in December 2022 "Country Garden Real Estate Group *** 2022 Public Issuance of Corporate Bonds to Professional Investors (Phase II) (Variety 1)", with a scale of 800 million yuan, jointly created by China Securities Construction Investment ** Shares, the underwriter of China's ** financial shares, with a coupon rate of 488%。
At the same time, there is also the issuance of "22 Bidi 03", that is, "Country Garden Real Estate Group *** 2022 Public Issuance of Corporate Bonds to Professional Investors (Phase II) (Variety 2)", with a scale of 200 million yuan, which is fully unconditionally and irrevocably guaranteed by Guangdong Zhongying Shengda Financing Guarantee Investment Co., Ltd., with a coupon rate of 40%。
On December 11, Country Garden Real Estate announced the results of the resale of "22 Bidi 03" bondholders. According to the data provided by the Shenzhen Branch of China** Registration and Clearing Co., Ltd., the number of effective resale declarations for "22 Bidi 03" during the resale registration period is 0, the resale amount is 0 yuan (excluding interest), the number of resold is 0, and the resale amount is 0 yuanAfter the revocation of the resale, the remaining number of unsold bonds is 2 million.
On August 12 this year, Country Garden announced the suspension of trading of 11 of its domestic corporate bonds, including "22 Bidi 02" and "22 Bidi 03", to start the restructuring of domestic bonds. In addition to "22 Bidi 02" and "22 Bidi 03", the other 9 bonds have been successfully rolled over and paid according to the time node, involving an amount of about 1470.2 billion yuan.
**Assets and equities relieve pressure
Country Garden's sales and financing faced serious challenges. On December 14, Country Garden Holdings ***02007HK) announced that on December 13, 2023, Country Garden, Wanda Commercial Management Group and Zhuhai Wanying entered into an agreement, pursuant to which Jinyi Global***, an indirect wholly-owned subsidiary of Country Garden, conditionally agreed to Zhuhai Wanying or Wanda's designated party**, and Zhuhai Wanying or Wanda's designated party conditionally agreed to purchase the target shares (equivalent to 179% equity) at a consideration of RMB 3068518970.
The target company of the transaction, Zhuhai Wanda Commercial Management Group, is held by Jinyi Global for approximately 179%, after the completion of the ** matter, Country Garden will no longer have any interest in the target company.
Country Garden said that the group is actively resolving the pressure of phased liquidity. Since the Group only holds a minority interest in the target company, it will be beneficial to Country Garden to lock in a more suitable transaction and exit path in advance to avoid the material uncertainty of the timing and amount of exit in the future, and effectively protect the value of the company's strategic investment equity assets.
In addition, as Country Garden is actively seeking an overall solution to comprehensively solve the current offshore debt risk, the first tranche of funds will be used to settle the debts related to the pledge of the target shares of the second phase and release the target shares of the second phase. The net proceeds from the target shares** received by Jinyi Global under the agreement will be used for offshore restructuring.
In fact, Country Garden's self-help is not the first time it has been an asset. As one of the only two shareholders of the Guangzhou Asian Games City project, Country Garden, which is experiencing liquidity difficulties, announced on August 25 that Country Garden will own the Guangzhou Asian Games City project 2667% equity interest** to China Overseas Real Estate, with a total consideration of approximately 1291.5 billion yuan.
In addition, recently, Country Garden has also transferred the equity of a number of companies such as **Shifang County Country Garden Real Estate Development, Baoding Biqing Housing Real Estate, Baoding Biqing Real Estate Development, Qinhuangdao Bixiu Real Estate Development, etc.
Efforts should be made to increase revenue and reduce expenditures and reduce expenditures
At Country Garden's December group management meeting, Yang Huiyan, chairman of the board of directors of the group, pointed out that Country Garden will have three main tasks in the next 12 months: ensuring delivery, operation and credit.
On the one hand, Country Garden has done its best to increase revenue and reduce expenditure. According to Country Garden's official WeChat, in 2023, the company will do its best to reduce administrative expenses, and the total amount will be significantly reduced by nearly 60% compared with 2021.
Late at night on December 12, Country Garden suddenly issued an announcement saying that executive directors Yang Huiyan, Mo Bin, Yang Ziying and non-executive director Chen Chong took the initiative to reduce their salaries. Among them, Yang Huiyan's annual salary was reduced from 370,000 yuan to 120,000 yuan, and Mo Bin's annual salary was reduced from 3 million yuan to 120,000 yuanYang Ziying was adjusted from 2 million yuan to 120,000 yuan;Chen Chong was adjusted from 370,000 yuan to 120,000 yuan.
It is understood that Country Garden has cancelled all senior executives' car allocation, and when there is a need for work, it can apply for official car dispatch or use its own car to achieve intensive control of vehicle costs and cost reduction. For all buses, including the former executives' car allocation, asset revitalization will be carried out through internal public auction and external labor to offset debts. Treatments such as reimbursement for senior executives' physical examinations and free canteens for executives have also been cancelled. All administrative expenses are based on the principle of zero, no unnecessary expenditure, and rigid expenditures are reduced as much as possible through integration and intensification.
In addition, Country Garden has once again merged with the region. Start the regional merge again. On December 5, Country Garden adjusted its organizational structure and merged 14 of its regional companies into 7 new regional companies.
Specifically, Hebei and Beijing were merged into the North China region;Shandong and northern Jiangsu were merged into the Lusu region, and northwest and Shaanxi were merged into the central and western regionsAnhui and Zhejiang were merged into the Zhejiang-Anhui region;Jiangxi and Fujian were merged into the Jiangxi-Fujian region;Yunnan and Sichuan were merged into the Sichuan-Yunnan region;Guangxi and Jiangzhong were merged into the Jiangzhong region. After the merger is completed, Country Garden also has 21 regional companies.
Country Garden responded that under the current industry situation, this adjustment aims to further improve the adaptability of the organization and business, promote flat and efficient management, synergy and complementarity of available resources, and make every effort to ensure the realization of the strategic goal of "guaranteed delivery".
The family "smashed the pot and sold iron" to support the company
In terms of overseas debt restructuring, it is reported that Country Garden Holdings*** is passing DF King Limited identifies the holders of 17 offshore bonds, and the identification process is valid until 24 January 2024.
Yang Huiyan said at the group's internal management meeting in December, "The family will definitely sell iron to support the company." ”
As the controlling shareholder, the Yang Huiyan family has fully provided financial support for the company, and has provided a total of about 41 billion Hong Kong dollars through borrowing, increasing holdings, purchasing bonds, and dividends on behalf of shares since its listing, and has never provided 15HK$600 million interest-free and unsecured borrowing, which raised 50HK$500 million was lent to the Group without interest and without collateral. In addition, since the first large-scale donation in 1997, the company and the family have made cumulative charitable donations of more than RMB10.5 billion.
Yang Huiyan also revealed that in the next 12 months, the delivery challenge will enter the deep water area, and the delivery volume of Country Garden is expected to exceed 400,000 units in 2024, which is still huge. "Ensuring delivery is a very difficult but very important task, and I hope that everyone will be ready to fight, attach great importance to it, and do a good job of pre-planning. ”
According to statistics, in the first 11 months of this year, Country Garden Group has delivered a total of about 500,000 houses, with a cumulative delivery area of 60.43 million square meters, involving 31 provinces and 240 cities. The delivery volume once again ranked first in the industry, far ahead in the industry. Among them, some projects in Shandong, Shanxi, Jiangsu, Anhui and Guangxi were delivered ahead of schedule, and some projects in Hebei, Hubei and Hunan were all delivered.
Written by: Nandu Bay Finance Agency reporter Wang Yanling.