On February 21, Jinke Co., Ltd. officially issued an announcement: the company officially submitted the relevant materials of the reorganization application to the Chongqing Fifth Intermediate People's Court on the same day. According to the source, the reorganization application has been accepted by the court.As a well-known Chongqing real estate enterprise, Jinke was established in 1998 and has become the No. 1 representative private enterprise in Chongqing for many years. In 2021, Jinke Real Estate Wealth Management uncovered Jinke's debt crisis. On December 30, 2022, Jinke officially defaulted on one US dollar, and in 2023, its domestic debt will also default. Although Chongqing Municipality has given Jinke multiple financial and resource support, Jinke still cannot reverse the situation. In 2022, there will be a huge loss of 10 billion. In May 2023, Chongqing Duanheng Construction Engineering ***, the debtor of Jinke Co., Ltd., applied to the Chongqing Fifth Intermediate People's Court for reorganization of the company because it could not pay off its due debts and obviously lacked solvency, but as a listed company, it still had a certain reorganization value. Although it was filed for bankruptcy reorganization, Jinke's attitude was not only very positive, but also very fast. A month later, 7 announcements were issued in a row, announcing to the outside world that the good news of war investment was about to be ushered in: it had signed a "Strategic Investment Framework Agreement" with Great Wall Guofu Real Estate. Great Wall Wells Fargo Real Estate is a real estate platform owned by Great Wall Assets. It is worth noting that although AMCs have been very active in the field of bankruptcy reorganization in recent years, most of the time they have acted as financial investors. This time, Great Wall Assets directly acted as a war investor, which is relatively rare. From the perspective of the real estate industry, Jinke is also the first real estate company to officially enter the bankruptcy reorganization procedure in recent years, after Oceanwide Holdings entered the pre-reorganization stage, but due to serious insolvency, the court declared the pre-reorganization failed. Bankruptcy reorganization is another way of "rebirth", Jinke shares said: if the company successfully implements the reorganization and completes the reorganization plan, it will be conducive to optimizing the company's asset and liability structure, improving the company's continuous operation and profitability; If the reorganization fails, the company will be declared bankrupt. So this is a breakthrough move for both real estate companies that are currently mired in debt and national AMCs that are carefully selecting projects to bail out. According to the announcement on June 30 last year, Great Wall Guofu intends to participate in the pre-reorganization of Jinke shares independently or with other partners to form an investment consortium as a reorganization investor. The strategic cooperation between Great Wall Asset Management and Jinke Co., Ltd. includes three aspects: specific asset revitalization, pre-reorganization procedures, and Jinke's subsequent development strategy
Promote the revitalization of assetsGreat Wall Guofu Real Estate will provide necessary financial support to promote the operation revitalization and value enhancement of project companies that meet the conditions and are approved by Party A or the investment consortium.
Promote the reorganization workAfter Great Wall Guofu Real Estate or the investment consortium is confirmed as the reorganization investor, and the Jinke reorganization plan is approved by the relevant regulatory authorities and approved by the people's court, the Great Wall Guofu or the investment consortium will implement the reorganization investment agreement and reorganization plan.
Promote strategic integrationAfter Great Wall Guofu Real Estate becomes a shareholder of Jinke through judicial reorganization, the two parties will carry out comprehensive strategic cooperation in various aspects such as people's livelihood real estate development, smart property services, real estate investment and operation of science and technology industry, investment and operation of cultural, commercial, tourism and health care real estate, urban renewal and affordable rental housing, diversified and innovative agent construction, industrial and commercial operations, and the resolution of social non-performing assets, so as to create a new model of high-quality development that focuses on both light and heavy, rental and purchase, and actively explore new development tracks. The two parties are committed to building Jinke into a first-class enterprise group for a better life in China.Direct investment in real estate companies is rare in the non-performing asset industry in the past two years.
On the one hand, a large amount of financial support is required to revitalize the project, and there are many projects that come to seek cooperation. On the other hand, due to the many uncertainties of the insuring real estate companies, the national AMC is extremely worried about the "second thunder" due to the non-cooperation of the other party or relevant departments.
However, Great Wall Assets is not an absolute "lone brave" this time. After careful analysis, after Jinke shares were applied for reorganization, Jinke and Shaanxi Construction Group had reported to the leaders of Chongqing Municipality for cooperation", and nodded in affirmation, but then the news did not make substantial progress. But a month later, Great Wall Assets suddenly entered, so the industry speculated that Great Wall Assets was not "acting alone", and it was likely to be a pre-restructuring of Jinke shares with Shaanxi Construction.
This is also in line with Great Wall Asset's consistent practice: bailing out real estate often involves other central state-owned enterprises. For example, in the bailout of Kaisa, it pulled up the China Merchants Shekou. For real estate, Great Wall Assets generally formulates risk mitigation measures, one is to introduce the head stable real estate enterprises of central state-owned enterprises to implement mergers and acquisitions, the second is to effectively isolate risks to promote follow-up development and ensure the delivery of housing, the third is to carry out a quasi-common benefit debt model to revitalize the underlying assets, and the fourth is to revitalize the asset-light model.
In a comprehensive comparison, Great Wall Asset Management is the worst among the five major AMCs, not only the original asset quality is not high, but the performance decline in the past two years is also relatively serious. However, during the period when the commercialization transformation of the four major AMCs made great strides into real estate, Great Wall Asset Management was not too "aggressive". From the perspective of the scale of real estate risk exposure faced by the four major AMCs, Great Wall Asset Management is the only AMC with less than 100 billion yuan. There are only 8 real estate enterprises involved in its foreign investment subsidiaries. Its real estate platform, Great Wall Guofu Real Estate, currently only has 7 subsidiaries, including Shanghai Changhua Wancheng, Changsheng Life Insurance, Shanghai New Jinsui Industrial, etc., indirectly holding 93 companies, while China Cinda has as many as 200 companies.
In recent years, although there have been investments in real estate, such as Lei Taihe, the total amount is not large.
In addition, Great Wall Asset Management is best at "substantial restructuring". During the period of commercialization transformation, a number of ST companies such as Chongqing Titanium Dioxide, Northwest Bearing, Guangming Furniture, Drunkard Liquor, Yueyang Hengli, and Chaori Sun were reorganized on the A** field, so that they could resume trading or resume listing; Tianyi Technology, Qinchuan Machine Tool, China First Heavy Industries, Jinxi Axle, Xinbang Pharmaceutical, Dongsheng Technology and other enterprises were reorganized, so that they could gain vitality through restructuring and restructuring or IPO. Among them, through the operation of "financial and non-financial non-performing assets acquisition and overall bankruptcy reorganization + asset restructuring" mode of ST Chaori, it successfully resolved the first public debt crisis in China, protected the rights and interests of investors, and promoted the integration of China's photovoltaic industry and supported industrial upgrading. In addition, through the "debt restructuring + debt-to-equity swap" model, China Railway has successfully resolved the first private placement debt crisis of a central enterprise, promoted the debt restructuring of China Iron Goods, accelerated the recovery of financial financing capacity, and effectively revitalized state-owned assets.
In this round of disposal of real estate non-performing assets, Great Wall Assets may use the advantages of business means to push Great Wall Guofu Real Estate to the forefront.