Greenland holding group has received a lot of negative news recently. The three red lines alarm, multi project shutdown and rights protection, debt collection by suppliers, asset sale, and the collapse of several US dollar bonds, one by one, the market confidence dropped sharply.
The latest public information is that Greenland is putting 23.1 billion yuan of commercial office assets on the shelf, and the commercial office project recommendations exposed are from the groups business division 1 property book. Its probably one of the fastest self-help ways he can think of.
However, the green places are eager to deny their self-help intentions.
According to the staff of the first division of Greenland holding business, the property book is a collection of information for participating in the double 11 online activity, not by the group level, nor by the concept of selling off assets. Greenland holdings also said that these commercial projects are properties for sale, and the sale of commercial projects is normal. 30% of the annual sales amount of the company comes from commercial property sales.
In addition, Greenland is also trying to find out the battle pitch. According to market news, Greenland held an investor meeting a week ago and said that the mixed reform could be completed before this years Spring Festival, and the war investors would introduce central enterprises with financial background.
On the morning of November 19, the management of Greenland holdings held a telephone meeting with bond investors, and the specific content was not disclosed. However, at the end of the year, it will meet the centralized payment period of bonds. About 8.87 billion yuan of bonds will mature in December, and the debts due in January next year will slightly exceed 8.1 billion yuan. These are all impending debts. For the green space which is on the verge of collapse of public opinion and investment confidence, we cant add new thunder.
Data on November 19 showed that greenbelt Holdings US dollar bonds plummeted. Among them, the U.S. dollar bonds with an interest rate of 5.875% due in 2024 fell by 2.5 cents per share, the largest drop since March 19; the US dollar bonds with an interest rate of 7.25% in 2025 fell by 2.9 cents per share, the largest decline in history. A day earlier, Greenland holdings also fell a dollar bond with an interest rate of 6.125% due in 2023, falling 1.9 cents to 92.1 cents per share.
Behind the decline in US debt, green lands high debt crisis has made investors lose confidence.
There are quite a lot of negative news from Greenland recently. Investors are worried that Greenland will default on its debts and sell them at a discount, which leads to the decline of its US dollar debt. Huang Lichong, co-founder and senior real estate financial analyst, told China real estate news. In its view, Greenland is one of the most vulnerable companies to default, which also represents the views of some institutional investors.
The three red lines of real estate financing set by the regulatory layer make the problem of high debt of Greenland holdings exposed.
According to the third quarterly report of Greenfield holdings, as of September 30, 2020, the total liabilities of the company were RMB 103trillion, an increase of 1.77% compared with the beginning of the year. The short-term interest bearing liabilities and long-term interest bearing liabilities were 102.984 billion yuan and 220685 million yuan respectively, with the ratio of long-term interest liabilities of 2.14 yuan. The book monetary capital of the company is 80.572 billion yuan, down 2.2% year-on-year, which is difficult to cover short-term liabilities.
Taking the three red lines as the standard, as of September 30, 2020, the companys asset liability ratio after excluding advance collection was 82.38%, an increase of 1.58 percentage points compared with the beginning of the year; the net debt ratio was 183.45%, an increase of 27.85 percentage points compared with the beginning of the year; the cash short debt ratio was 0.78, increased by 0.02 compared with the beginning of the year, and the three red lines were all stepped on.
This means that Greenfields subsequent financing will be greatly restricted and it will be more and more difficult to borrow money.
In fact, Greenfield Holdings aggressive expansion route in recent years has laid the groundwork for its high debt. Its asset liability ratio has been high since 2015, hovering around 88% for a long time, far higher than the industry average of 80%.
High debt must have a high turnover to achieve the elimination, otherwise it will fall into the capital chain crisis. According to the data of Kerry Research Center, from January to October 2020, the full range sales volume of Greenland holdings was 241.38 billion yuan, a year-on-year decrease of 10.3%; in October, the full-scale sales volume was 23.5 billion yuan, a year-on-year decrease of 6.4%. In 2019, the contract sales amount of Greenland is 388 billion yuan, which is only 0.1% higher than that of the same period in 2018, which is 77.6% of its annual sales target.
Just last month, an organization published an article Greenland, please pay to collect debts from the southwest business unit of Greenland Group. The total amount of advertising money demanded by the article is only 75000 yuan. Soon, the article was deleted.
Its not easy to save yourself
Some analysts say that the terrible thing about the debt crisis is not the huge scale of debt, but the debt spiral. Debt spiral is usually understood as a chain reaction of credit collapse. If an enterprises debt crisis breaks through the foundation of social financial credit and causes the asset price to plummet as a whole, even the enterprise with healthy balance sheet may fall into debt spiral and collapse, eventually leading to financial crisis.
This is not alarmism. The urgent task of green space is how to save itself.
Earlier, it was reported that Greenland Group intends to sell 27 property projects, including 14 projects in Shanghai and Jiangsu, with a total price of 23.1 billion yuan. In the promotion projects, there are many complex buildings on the subway and mature business district properties with the advantages of downtown location.
In response, Greenland said that for Greenland, the sale of commercial projects is the norm. 30% of the sales amount of Greenland comes from commercial property sales every year. To be exact, these commercial offices can not be called assets, they are the same saleable properties as residential buildings.
If 27 commercial properties can be sold successfully, the cash flow pressure of Greenland will be greatly reduced. But whether such a large-scale asset can find a buyer in a short time and sell it at a good price is also an unknown question. After all, in the current real estate industry as a whole to reduce debt, I am afraid that it is difficult for enterprises to have cash and courage to dare to take such a large investment.