The Solution of the First Case of Violation of Urban Investment Platform in Xian Weibei Investment Fund Dilemma

category:Finance
 The Solution of the First Case of Violation of Urban Investment Platform in Xian Weibei Investment Fund Dilemma


Weibei Investment Group is under the management of Lintong Modern Industrial Group Management Committee of Xian Weibei Industrial Zone (hereinafter referred to as Management Committee). According to the reporters understanding, the main business of Weibei Investment Group Company is the investment and construction of urban roads and infrastructure, which belongs to the largest city investment platform company in Lintong District.

According to the reporter, the legal representative of Weibei Investment Group is Zheng Kefeng, who is also the chairman and general manager of Weibei Investment Group. On August 7, Zheng Kefeng, in an exclusive interview with reporters, said: The companys financial constraints began in October 2018, and the financial pressure is relatively high.

As a key planning and construction project in Xian, the Lintong Modern Industry Group held its fourteenth ninety-sixth executive meeting on November 23, 2009, to determine the construction of a new modern industrial city in Weibei, Xian (Lintong). Today, Weibei Investment Group, the main construction unit of Lintong Modern Industrial Group, is facing difficulties such as debt collection by financial institutions and debt extension.

Debt concentration maturity

On August 7, the reporter came to Weibei International Business Center, where Weibei Investment Group is located. He crossed the Qinwang Bridge on the Weihe River. Looking ahead, Weibei International Business Center stands on the Bank of the Weibei River, which is a landmark building in Lintong Modern Industrial Group Area.

At this point, the staff of China-Thailand Trust are coordinating the debt repayment plan with Weibei Investment Group on the 5th floor of Weibei International Business Center.

Earlier, the relevant person in charge of the China-Thailand Trust told reporters that the products involved in the China-Thailand Trust are Yuantai No. 3, the vast majority of the principal has been paid, and the remaining principal is more than 35 million.

At the same time, the reporter learned that most of Weibei Investment Groups financial institution loans occurred in 2016-2018. According to the reporters understanding, from 2016 to 2018, Weibei Investment Group and more than 15 institutions including China-Thailand Trust, Changan Trust, Shaanxi Investment Trust, Huaxia Bank, Beijing Bank, China Aviation Trust, Xian Bank, Pingan Trust and other financial loans totaled more than 2 billion yuan.

Zheng Kefeng confirmed to reporters that most loans involving Bank of China and Bank of Xian have been extended. After the expiration of the CAAC Trust Loan, a renewal contract agreement has been signed. It is worth noting that the loan financing period is mostly one-year, two-year, the longest is three-year and the shortest is six months. Zheng Kefeng told reporters that since the end of 2018, the companys financing loans have concentrated on maturity, and the financial pressure is very great.

On the other hand, Zheng Kefeng said that from 2018 to the first half of 2019, the company also encountered financial constraints. When cooperating with financial institutions, it is found that the original part of products of many institutions can be issued after they expire one after another. However, due to the stricter supervision of financial markets, some trust products can not be issued again, which causes great financial pressure to the company.

Zheng Kefeng laughed, I was originally engaged in park planning, construction and management, for the financial market, including business are not very clear, but also in the process of gradually contacting, slowly learning a lot.

In the first half of 2019, Weibei Investment Group only relied on external financing to solve its project development problems. On June 28, the business department of Shaanxi Branch of Agricultural Development Bank accelerated the green financial services and put in 49.2 million yuan of medium and long-term loans to fully support the sewage treatment and reclaimed water reuse project of Xian Weibei Water Co., Ltd., a subsidiary of Weibei Investment Group.

When it comes to obtaining the financing from the Shaanxi Branch of the Agricultural Development Bank when the company is in trouble, Zheng Kefeng believes that as long as the project is really well done, the difficulty is temporary.

Regarding the reasons for default, Weibei Investment Group said that since 2017, the state has regulated the financing management of government platform enterprises more regularly, the companys new financing has been greatly reduced, and the company is in the peak period of repayment, resulting in capital shortage.

Great investment in park construction

On the one hand, the construction of the park, including roads, greening, bridges, public infrastructure and so on, needs a lot of funds; on the other hand, the park is still in the process of attracting investment, and the enterprises in the park are still in the process of cultivation, resulting in cash flow items such as after-tax items not kept up in time, which may lead to the fall of Weibei Investment Group. One of the reasons for the tight financial pressure.

Zheng Kefeng told reporters that Lintong Modern Industrial Group undertook the important task of industrial transfer and upgrading in the development of Daxi, hoping to introduce more modern equipment manufacturing enterprises, for example.

Reporters through public information inquiries, November 23, 2009, the peoples government of Xian held the fourteenth ninety-sixth executive meeting to determine the construction of Weibei (Lintong) modern industrial new city in Xian. On August 16, 2012, Lintong Modern Industrial Group was officially unveiled and set up. It undertakes the engine of industrial development of Xian, the vice-central city of Lintong, and undertakes the important task of industrial transfer and upgrading and shaping a model of new eco-industrial park in the development of Greater Xian.

The data also show that the park includes China Gold Groups Chongqing Iron and Steel Production Base Project, Auto College, the first F3 track in Northwest China, Neighborhood Center Project, the Second Affiliated Weibei General Hospital of Xian Jiaotong University, Weibei Middle School of Shaanxi Normal University and Qingdao Beer Production Line Project with an annual output of 1 million litres. Reporters noted that although many projects of Auto College and the first F3 track in Northwest China have been completed, many projects including the neighborhood center project, the second Weibei General Hospital affiliated to Xian Jiaotong University and Weibei Middle School of Shaanxi Normal University are under construction at the same time.

Zheng Kefeng said that Weibei Investment Groups pre-project has the situation of full financing agent construction, which needs a lot of external financing support.

In addition, Zheng Kefeng said that although the companys financial pressure is very great, projects including Weibei General Hospital, the Second Affiliated to Xian Jiaotong University, Weibei Middle School of Shaanxi Normal University should be completed as soon as possible, because the attraction of the park will be increased by some large projects in the future.

Zheng Kefeng told reporters that in the past two years, the tax revenue of manufacturing enterprises in the pure foreign market in Lintong Modern Industrial Group Park was about 100 million yuan annually. Previously, in the process of attracting investment, the development of enterprises needs to be nurtured after they are stationed. The Park offers many preferential conditions for enterprises, including tax relief, etc. In previous years, there was almost no tax revenue.

Land transfer is shelved

In addition to the large investment in the construction of the park and the concentration of loans due to financial institutions, the pressure of funds of Weibei Investment Group is tense. Another reason is that part of the residential land on the Bank of Weibei River is not transferred in time, which leads to the failure of the land transfer fee to return in time.

Because of the delimitation of the red line of ecological protection, the approved land can not be sold on schedule, and the accounts receivable of our company can not be recovered as planned. Zheng Kefeng said.

Zhu Jun, head of financing department of Weibei Investment Group, confirmed to reporters that on August 21, 2018, Xian issued the Notice on the Establishment of Weihe Ecological Zone in Xian. According to the circular, with the consent of the Shaanxi Provincial Peoples Government, the Xian Peoples Government decided to establish Weihe Ecological Zone in Xian, focusing on the development of ecological protection, ecological tourism, cultural leisure, agricultural sightseeing, beach wetland management and other projects, prohibiting the construction of polluted industrial and real estate projects, and restricting the development of construction projects. Strict project approval.

It is understood that the Weihe ecological zone of Xian City is located in the Xian section of the Weihe River. Longitudinal scope: the boundary of Zhou (Zhou Zhi) - Mei (Meixian) on the South bank, Lintong (Lintong) - Weinan (Weinan) on the East (excluding Xianyang section); Qin (Qin and Han New City) - Gaoling (Gaoling) on the North bank, Lintong (Lintong) - Weinan (Weinan) on the east. Horizontal scope: The levees along both sides of the Weihe River are controlled outward according to the 200 meters of urban core area, 1000 meters of urban section and 1500 meters of rural section.

In addition, the circular requests that the urban construction planning along Weihe ecological zone should be subordinated to the ecological zone planning, and the completed sections should be gradually transformed to meet the requirements of the ecological zone. For access projects in ecological zones, the height of the waterfront skyline should be strictly controlled to ensure low-intensity and low-density construction requirements.

Zheng Kefeng bluntly said: The procedures have been completed, land transfer process, affected by policy and then stopped.

Transformation of Platform Company

In the process of promoting debt resolution, Weibei Investment Group is constantly promoting the previous planned land transfer work.

Regarding the time limit for debt resolution, Zheng Kefeng told reporters: Lintong District Finance Bureau and Xian City Finance Office are actively coordinating debt resolution, and it is expected that the debt will be basically solved by the end of this year.

Financers, guarantors and local governments are doing their best to actively coordinate the implementation of repayment funds, said the person in charge of China-Thailand Trust.

Speaking of encountering the debt crisis, Zheng Kefeng concluded that, firstly, the land transfer did not follow the original schedule; secondly, the financial institutions drew loans; thirdly, short-term and long-term loans, debt concentrated to maturity; fourthly, after making investment and financing plans, the implementation process was not fully complied with due to policy changes and other reasons. According to the investment and financing planning, insufficient funds risk reserve insurance is the cause of the current shortage of funds.

In addition, Weibei Investment Group said that it would take the initiative to restructure and take the following measures: 1. Increase cash flow through cash realisation of stock assets, equity transfer and pledge assets to enhance short-term risk resistance; 2. Develop stock debt replacement and replenish liquidity under the support and guidance of the government; (4) Accelerating the land transfer in the park, and promptly recovering the accounts receivable by the group company; and (4) consulting with the stock financial institutions to ensure the renewal of loans.

As the head of a city investment platform, Zheng Kefeng has his own views on the transformation of the city investment platform company after experiencing the development of the companys own debt and the financial pressure. Zheng Kefeng stressed to reporters that the local city investment platform companies can never form hidden local debts, can not rely mostly on financing to develop, new project construction must rely on project income to generate cash flow. However, the platform company has become a government project agent, earning only project management fees, strictly controlling investment and financing planning, and increasing the reserve of capital risk coefficient. Zheng Kefeng also appealed that if the CITIC Platform Company is actually doing things, we hope that financial institutions do not draw loans and leave more room. Regarding the future development of Weibei Investment Group, Zheng Kefeng said, The most difficult thing has been done and the situation should be improved. According to a reporter from a trustee, he said that there are still doubts about Weibei Investment Groups debt resolution program. Source: Responsible Editor of Economic Observer: Yang Qian_NF4425

As the head of a city investment platform, Zheng Kefeng has his own views on the transformation of the city investment platform company after experiencing the development of the companys own debt and the financial pressure.

Zheng Kefeng stressed to reporters that the local city investment platform companies can never form hidden local debts, can not rely mostly on financing to develop, new project construction must rely on project income to generate cash flow. However, the platform company has become a government project agent, earning only project management fees, strictly controlling investment and financing planning, and increasing the reserve of capital risk coefficient.

Zheng Kefeng also appealed that if the CITIC Platform Company is actually doing things, we hope that financial institutions do not draw loans and leave more room. Regarding the future development of Weibei Investment Group, Zheng Kefeng said, The most difficult thing has been done and the situation should be improved.

According to a reporter from a trustee, he said that there are still doubts about Weibei Investment Groups debt resolution program.