The chairman of the board of directors has become old and the biggest private copper enterprise is facing liquidity crisis

category:Finance
 The chairman of the board of directors has become old and the biggest private copper enterprise is facing liquidity crisis


Recently, the reporter of E company went to Dongying to visit Fangyuan nonferrous metals factory, to restore the crisis encountered by Fangyuan nonferrous metals and the response of Shandong Province and Dongying City.

The red brick wall, red gate and Dongying Fangyuan are erected on the gate with four large red characters. In addition, the symmetrical multi-storey buildings on both sides of the gate and the river in front of the gate make it very imposing. This is Fangyuan colored office, No.99, Liuyanghe Road, Dongying Economic and technological Development Zone.

At about 2:00 p.m. on June 22, Fangyuan colored security personnel took a rest in the shade under the tree on the east side of the gate, and three large trucks stopped at the gate. Before, there were a lot of big cars here. When I went this way, I saw a lot of cars coming in. Now I cant get a few cars a day. Is it that only enterprise leaders work here? I dont really know. A local citizen said.

On the 23rd, the reporter came to No. 99 Liuyanghe road again and made clear his identity, hoping to interview the companys leaders on the companys recent debt situation and business situation. Security personnel then called for a man in a black T-shirt, who also knew that there had been a lot of reports from the company recently.

After asking about his intention, the man went to the factory to report by phone. After about two minutes, he walked out of the factory and said, its not very convenient for the leader to go out. Im very busy at this time. Anyway, everything Its normal. Now, its all very good. Im not very clear about the specific situation. Ill call you if theres a situation.

Fangyuan Nonferrous Metals Co., Ltd. (hereinafter referred to as Dongying Fangyuan) and Lufang metal materials Co., Ltd. (hereinafter referred to as Lufang metal) are the two core subsidiaries of Fangyuan Nonferrous Metals Co., Ltd. Tianyancha equity penetration shows that the controlling shareholder of Dongying Fangyuan is Fangyuan nonferrous metal industry and Trade Co., Ltd. (hereinafter referred to as Fangyuan industry and trade), holding 71.39% of the companys shares. Cui Zhixiang holds 74.3% of Fangyuans shares. Founded in 2006, Lufang metal is located at No.22, backbone road, breeding area, Dongying District. Cui Zhixiang holds 82% of the shares of Lufang metal, mainly engaged in the production and sales of gold, silver, copper and nickel metal materials.

In 2018, the revenue of Shandong metal and Dongying Fangyuan were 30.608 billion yuan and 30.511 billion yuan respectively. In the list of Chinas top 500 private enterprises in 2019, 278 and 279 respectively. In the list of top 100 enterprises in Shandong Province in 2019, there are 16 enterprises in Dongying, Shandong metal and Dongying Fangyuan rank 10th and 11th respectively in Dongying. In other words, in terms of revenue scale, the two companies are the 10th and 11th largest enterprises in Dongying.

Fangyuan nonferrous metals has a production capacity of 700000 tons of electric copper and a normal output of 500000-600000 tons, accounting for 6% of the national and 3% of the global market share. The companys refined copper output ranks fourth in China, and gold and silver output rank in the top ten in China. The companys annual sales revenue is more than 80 billion yuan, and has been listed in the top 500 Chinese enterprises for 10 consecutive years.

In addition, Cui Zhixiang has logistics, construction, property, catering and other companies. From 2017 to 2019, Cui Zhixiangs wealth was 8.5 billion yuan, 10 billion yuan and 9.5 billion yuan, ranking 455, 354 and 427 respectively. In 2011, its assets exceeded 10 billion yuan, and it was once ranked as the richest man in Dongying.

Guangli port is located in Dongying, not far away from the south of the plant, about 4 km by car. Being close to the port is one of the important factors for Fangyuan nonferrous metals to develop and grow up to now.

2u3001 The liquidity crisis broke out suddenly

It is not a secret in Dongying that there is a liquidity crisis of Fangyuan nonferrous metals.

Fangyuan nonferrous metals has been hit repeatedly recently. People familiar with the matter disclosed that Ernst & Young issued a report on Fangyuan nonferrous metals. Compared with the publicly disclosed figures, Dongying Fangyuan and Lufang metals have significantly higher debt, lower profits and lower output. Sources said the audit covered the accounts of Dongying Fangyuan, Shandong metal and the other four Fangyuan departments in 2018 and the first three quarters of 2019.

So, how much debt does Fangyuan nonferrous metals have at present? How are these liabilities accumulated step by step?

As of June 30, 2019, the current liabilities and non current liabilities of Dongying Fangyuan were 9.138 billion yuan and 280 million yuan respectively, and the financial expenses reached 281 million yuan. In the first half of 2019, the operating revenue of Dongying Fangyuan was 12.289 billion yuan, with a year-on-year growth of 9.43%; the net profit attributable to the parent company was 445 million yuan, a year-on-year decrease of 0.19%.

Shandong metal only issued 600 million yuan and 200 million yuan of ultra short-term financing in 2014 and 2015, and there was no recently published financial data. According to the data released at that time, as of the end of June 2014, the interest bearing debt of Lufang metal was 3.515 billion yuan, and the total amount of external guarantee was 1.7 billion yuan.

People in Dongying capital circle disclosed to the reporter of E company that the direct inducement to bring Fangyuan nonferrous metals into the crisis is the US dollar debt issued by the company in 2019. Moreover, the incident is very sudden, and it is difficult to deal with it locally.

In 2019, Fangyuan nonferrous metals has more international financing business. According to the companys official website, in the first half of 2019, the company completed the foreign debt syndicated loan of USD 430 million led by ABN, increased the bilateral loan of Russia foreign trade bank by 100 million euro, continued the loan of 50 million USD from DBS Bank and 100 million USD London copper discount swap financing business of Abu Dhabi bank.

In the second half of 2019, Fangyuan nonferrous metals will usher in a period of concentrated debt repayment.

On October 31, 2016, Dongying Fangyuan issued a bond of RMB 1.5 billion, 16 square yuan 01, with the maturity date of October 31, 2019. In addition, there are two overseas debts due, namely, the French Foreign Trade Bank and the Netherlands Cooperative Bank, with the loan balance of 33.33 million yuan and 25.157 100 yuan respectively, and the maturity dates of the loans are November 10, 2019 and December 22, 2019.

It can be seen that although the liquidity crisis of Fangyuan nonferrous metals is sudden, it has a cause.

3u3001 Two enterprises of bank loan guarantee went bankrupt

As early as December 2019, there were media reports that Fangyuan nonferrous metals applied to the government for bankruptcy. On December 12 of that year, the company declared that the bankruptcy information was untrue. However, there is a certain degree of positive contact with debt institutions to solve the problem of debt liquidity.

A capital circle personage of Dongying disclosed to the reporter of E company that he had heard about the tense capital chain and bankruptcy rumors of Fangyuan nonferrous metals last year.

In addition to the immediate US dollar debt repayment crisis, Fangyuan nonferrous metals also experienced the problem of bank withdrawal under the situation of tight money.

E companys reporters found that the four banks concentrated on taking measures at the end of last year. Among them, Dongying Branch of Hengfeng bank, Dongying Branch of Guangfa bank and Dongying Branch of Shanghai Pudong Development Bank are not only coordinated in pace, but also close in geographical location. Fuqian street is an important trunk road in Dongying City. The government of Dongying City and the Management Committee of Dongying Economic and Technological Development Zone are all located in the north of the road. Similarly, the three banks are also located in the north of Lunan road. Not far from their East is the office space of Fangyuan nonferrous metals.

Dongying Branch of Hengfeng bank in Dongying

Guangdong Development Bank Dongying Branch has also taken measures. However, according to the civil ruling issued by Dongying intermediate peoples Court on June 2 this year, the lawsuit was withdrawn because Dongying Branch of Guangfa bank failed to pay the case acceptance fee.

On December 17 last year, Fangyuan nonferrous metals official website published an article explaining the causes of the crisis. The company believes that in recent ten years, the production capacity of electric copper has been expanding rapidly from 200000 tons in 2006 to 700000 tons in 2016, and there are also large-scale technology investment. Much more than the accumulation of their own funds, using more borrowing capital. So far, the profit return bonus of new capacity has not been fully released, and the actual revenue profit can not be used as normal feedback supplement for the capital chain. At the same time, with the change of business environment in recent years, the tightening of money and the frequent withdrawal of loans have forced this part of capital out of the market, which directly leads to the tight and fragile capital chain of the company.

The reporter of E company noticed that the problem of inter enterprise guarantee in Shandong, especially in Dongying area, has occurred frequently in recent years, and banks in Dongying area have also been injured, and Fangyuan Nonferrous Metals Co., Ltd. is also in the guarantee circle.

However, Dongying Fangyuan said that at present, the local government is actively taking measures to deal with bankruptcy reorganization, with the government leading the fuse guarantee chain, and some banks have completed debt to equity swap. At present, the bankruptcy of the above-mentioned enterprises has not caused significant adverse impact on the enterprises, and there is no compensation risk for the time being.

In addition, Dongying Fangyuan also guarantees Shengli Power Machinery Group Co., Ltd. of Shengli Oilfield, with an amount of 30 million yuan. The guarantee situation is not good. On January 17, 2020, the execution ruling of Dongying intermediate court showed that the Dongying Branch of Everbright Bank applied for property preservation, and the court ruled to freeze 42 million yuan of Shengli Oil Field Shengli Power Machinery Group, Dongying Fangyuan and Shengli Oilfield furuite petroleum equipment.

Because of the debt collection of banks and other financial institutions, Cui Zhixiang has just become Lao Lai.

According to Tianyan survey data, at present, Dongying Fangyuan has three chattel mortgage information, which were registered on April 3, 2019, December 17, 2018 and April 7, 2015. Among them, the collateral of chattel mortgage information registered on April 3, 2019 is anode plate, cathode copper, copper concentrate and gold concentrate with a total value of no less than 3.6 billion yuan of Fangyuan nonferrous metals, the mortgagee is Dongying Branch of Bank of China Limited, and the amount of secured principal creditors rights is 2.5 billion yuan.

Lu Fang metal also has 5 chattel mortgage information in the near future. According to the chattel mortgage information on December 9, 2019, the company mortgaged 2128 items including baozi machine, smelting electric dust collector, etc. the mortgagee is Dongying Jinkai high tech Investment Co., Ltd., the amount of secured principal creditors right is RMB 700 million, and the debtors performance period is from December 5, 2019 to December 31, 2020. Dongying Jinkai high tech Investment Co., Ltd. is a wholly-owned subsidiary of State-owned Assets Operation Co., Ltd. of Dongying Economic and Technological Development Zone.

Interior view of Lu Fang metal

On the afternoon of June 22, the reporter called the office of Fangyuan nonferrous metals and tried to interview the leaders of the company. This staff member said, it is not convenient for us now. Any interview should contact the (Dongying Economic and technological) Development Zone first. The development zone now leads us, with a dedicated leader in charge, who is director Zhang. Director Zhang specially leads all aspects of financing and evaluation of our company. She was not sure when director Zhang would lead Fangyuan nonferrous metals, and said that if there was an interview demand, she would contact the development zone.

The reporter called the economic development bureau where the director of Dongying Economic and Technological Development Zone, Zhang, was in. The receiver said that he did not know the situation of Fangyuan nonferrous metals. On June 29, the reporter dialed the office phone number of director Zhang again. After the reporter said his identity, he said thank you and hung up.

The Management Committee of the development zone and the development zone has special personnel to lead the company in handling financing, evaluation and other matters

Previously, the company also issued a document saying: all departments of the municipal Party committee and government, provincial high-quality development service team, etc. are also vigorously coordinating resources from all parties to help relieve the financial crisis.

E company reporter noted that Chang Huaicheng visited three units of office space is intriguing. Among the three units, the report issued by Ernst & Young is the document cited by the informants. The debt committee is also an important unit. According to the relevant laws and documents, the debt committee is a working platform for collective consultation, collective decision-making and concerted action of creditor banking financial institutions to jointly solve the debt crisis of debt enterprises.

In the investigation, Chang Huaicheng said that for Fangyuan company, the current capital liquidity is difficult, which is a good opportunity for self motivation and physical fitness. The development zone will, as always, support and help Fangyuan company to overcome difficulties and ensure healthy and stable development.

5u3001 How should Shandong deal with the old kinetic energy

However, nonferrous metal industry is a typical traditional heavy industry with overcapacity and high financial leverage. The traditional heavy industry represented by copper smelting industry and non-ferrous metal industry is also a miniature of elephant economy in Dongying and even Shandong. Only analyzing the list of the top 100 enterprises in Shandong Province, we can find that most of the 16 enterprises are traditional heavy industries such as chemical industry, refining, nonferrous metals, papermaking and infrastructure construction.

The traditional heavy industry has its natural shortcomings, which is in sharp contrast with the beautiful bird, which belongs to the typical old bird and stupid bird. Wang Yi, an analyst of Zhuo Chuang information copper products, also told reporters of E company that according to the data calculation, copper smelting enterprises make hard money. At present, it is small and difficult for enterprises to make money simply by smelting copper. The price of copper concentrate and copper spot fluctuate in the same direction, and most of the time the fluctuation is not big, so the copper smelting enterprises earn the middle price difference, that is, the processing fee, and it is very hard to survive.

In terms of industry, copper smelting industry has overcapacity and serious industry differentiation. Jiangxi copper and Tongling Nonferrous metals are the two large state-owned enterprises with relatively rich profits. It is good for the industry to clear up.

In November 2018, Dahai group and Jinmao group in Dongying applied to the court for bankruptcy reorganization on the same day. About four months later, in March 2019, Dongying intermediate peoples court accepted the bankruptcy reorganization application of Shengtong group and Dongchen group. These four companies were once one of the top 100 private enterprises in Shandong Province, and also belonged to traditional heavy industries such as textile, chemical industry and steel cord.

On June 2, this year, Dongying intermediate peoples court, which has dealt with the bankruptcy and reorganization of many large-scale private enterprises, released a message, based on the needs of the situation of the citys new and old kinetic energy conversion, the resolution of financial risks, the optimization of business environment and the reality of bankruptcy trial, it actively sought the support of the Dongying Municipal Party committee and the municipal government, and jointly printed and issued the implementation of building a linkage mechanism between the government and the court for the disposal of enterprise bankruptcy Shi Yi. Through the joint issuance of documents by the government and the court, the implementation effect of the linkage between the government and the court can be improved. This is also the first government court linkage mechanism for normalization of bankruptcy trial in Shandong Province.

In 2008, taking advantage of the global financial crisis, Guangdong Province launched the changing cages for birds. After a painful period, the economy returned to vitality. Ten years later, in 2018, the State Council officially approved the overall plan for the construction of the comprehensive experimental zone for the transformation of new and old kinetic energy in Shandong Province, which is also the first comprehensive experimental zone of regional development strategy with the theme of the transformation of new and old kinetic energy in China. The new and old kinetic energy conversion launched by Shandong is quite similar to Guangdongs changing cages for birds. Guangdong chose to break down and then build up to clear up backward production capacity through the financial crisis. But ten years later, can the transformation of new and old kinetic energy still succeed? How to go? In Shandong, there are different views on the traditional old kinetic energy. Some people call it old trees make new branches, while others advocate changing cages for birds. No matter which path, it needs time and practice to verify. Source of this article: Official micro editor of E Company: Wang Xiaowu_ NF

In 2008, taking advantage of the global financial crisis, Guangdong Province launched the changing cages for birds. After a painful period, the economy returned to vitality. Ten years later, in 2018, the State Council officially approved the overall plan for the construction of the comprehensive experimental zone for the transformation of new and old kinetic energy in Shandong Province, which is also the first comprehensive experimental zone of regional development strategy with the theme of the transformation of new and old kinetic energy in China.

The new and old kinetic energy conversion launched by Shandong is quite similar to Guangdongs changing cages for birds. Guangdong chose to break down and then build up to clear up backward production capacity through the financial crisis. But ten years later, can the transformation of new and old kinetic energy still succeed? How to go? In Shandong, there are different views on the traditional old kinetic energy. Some people call it old trees make new branches, while others advocate changing cages for birds. No matter which path, it needs time and practice to verify.