Ningxia Yuangao groups bond default waves: the disappearance of the actual controller

 Ningxia Yuangao groups bond default waves: the disappearance of the actual controller

Three days ago, Yuangao groups bond 18 Yuangao 01 had a material default. It is reported that the issuance scale of 18 yuan Gao 01 is 100 million yuan, the issue date is November 20, 2018, and the actual cashing date is November 23, 2020. The rating agency is Dagong international credit rating Co., Ltd. (hereinafter referred to as Dagong international), and the lead underwriter is Huaxi Securities Co., Ltd. (hereinafter referred to as Huaxi Securities).

Xu Lang is the holder of 18 yuan Gao 01. Xu Lang told reporters that after the default, it has been unable to contact Gao Hongming, the actual controller of Yuangao group. As of November 27, Yuangao group still has no clear repayment plan.

After the default, the lead underwriter also told Xu Lang that Gao Hongming had lost contact. According to the economic observer, the main underwriter, Huaxi Securities, has also suffered from the fact that the actual controller of Yuangao group has not appeared since the default, and has been unable to get in touch with it, and has not held a bondholder meeting in time.

At the same time, more and more 18 yuan Gao 01 holders went to Yinchuan city to communicate with Huaxi Securities, the lead underwriter, and Yuangao group, the issuer. On November 27, Xu Lang told reporters that Zhang Yujun, deputy general manager in charge of operation and production of Yuangao group, came forward to meet with the lead underwriter and investors after the breach of the contract.

In addition to 18 Yuangao 01, there are still three bonds of Yuangao group, namely 19 Yuangao 02, 19 Yuangao 01 and 16 ningyuangao, totaling 1.03 billion yuan. As for the debt problem, in late November, according to investors recollection, Zhang Yujun said in his communication that he was currently coordinating land mortgage procedures and increasing bank credit; in addition, there would be other operating funds coming in. Try to cash some bonds first. But some private sector people are not convinced.

The relevant person in charge of Huaxi Securities said that the next step would be to hold a meeting of bondholders in time. If the debt repayment plan of Yuangao group is still unclear, legal measures will be taken to seal up the assets of 18 Yuangao 01 credit enhancement.

The above-mentioned Huaxi Securities related people told reporters that at present, the company has two staff members stationed in the Yuangao group located in Yinchuan city to understand the situation. ,

As of November 24, Huaxi Securities staff to the company, Gao Hongming has not yet appeared..

The above-mentioned private institutions told the economic observer that after the default, they have been in contact with the actual control of Gao Hongming, but they have been unable to get in touch. At present, it has called the police, the person said.

Xu Lang also told reporters that in October 2020, he had called Gaoyuan to inquire about the cashing arrangement of 18 yuan Gao 01, and Gaoyuan replied: it can be cashed..

As for the suspension of the trading of the existing bonds, according to the above-mentioned private institutions to reporters, on November 10, the main underwriter of Huaxi Securities replied: the business situation is the same as before, and there is not much change. The suspension is mainly due to price fluctuations

It is reported that since September, 16 Ningyuan high has plummeted in the secondary market. Up to now, the quotation of 16 ningyuangao is only 76.990 yuan / piece.

On November 24, the relevant person in charge of Huaxi Securities told reporters that the specific reasons for Yuangao groups default are still under investigation.

On November 26, Xu Lang learned that in November, Gaoyuan had disclosed to the lead underwriter that there was 50 million cash in the account, but it was not enough to pay 18 yuan Gao 01 in full. Considering the large scale of debt due in succession next year, the pressure on capital is very large.

According to the reporters understanding, Yuangao group was established in 2010, which is a diversified group company focusing on wind power equipment, heavy steel grid manufacturing, steel structure design and housing construction, copper mining and processing, garnet mine, quartzite mine and coal mine washing.

It is worth noting that on June 18, 2020, Yuangao group issued the announcement on the change of actual controller of Ningxia Yuangao Industrial Group Co., Ltd., which indicated that Beijing Yuangao Qifan Industrial Co., Ltd. (hereinafter referred to as Yuangao Qifan) accepted Guotong Huaxin Industrial Co., Ltd. (hereinafter referred to as Guotong Huaxin) for its long-term development consideration To transfer 100% of its equity to Guotong Huaxin Industrial Co., Ltd.

After this change, the controlling shareholder of the issuer is still far higher, with a shareholding ratio of 100%. However, since Guotong Huaxin holds 100% equity of Yuangao Qifan, the actual controller of Guotong Huaxin is SASAC of the State Council, so after the completion of this change, the actual controller of the issuer is changed from Gao Hongming to SASAC of the State Council.

However, on November 17, Yuangao group announced again that its controlling shareholder, Yuangao Qifan, would replace its supervisor and general manager for its long-term development. The supervisor has been changed from Liu Xiaoxia to Zhang Qinghu; the senior manager has been changed from Gao Yuan and Zhang Qinghu to Gao Hongming, with Gao Hongming as the general manager; the director has not changed, so far, the issuer has completed the relevant industrial and commercial change registration.

According to qixinbao inquiry, the actual controller of Yuangao group is still Gao Hongming.

As for why Yuangao group transferred its equity to Guotong Huaxin and changed back to Gao Hongming again, Huaxi Securities, the lead underwriter, explained to investors that Gao Yuan, Gao Hongmings son at that time, said that one of the important reasons for changing the companys identity into a state-owned enterprise was to facilitate financing. But later, because Guotong Huaxin did not transfer the equity agreement payment to Yuangao group, it transferred the equity to Gao Hongming again.

Short term debt pressure

According to Xu Langs understanding through the lead underwriter, Yuangao group currently involves about 3 billion yuan in outstanding bonds, non-standard loans and bank loans. By the end of the first half of 2021, the amount due has also exceeded 500 million yuan, resulting in great short-term debt repayment pressure.

According to investors, Zhang Yujun, deputy general manager of Yuangao group, said when introducing the overall debt to investors, the scale was about 3 billion yuan. But for the specific debt repayment plan, Zhang Yujun did not give investors a clear explanation. Zhang Yujun told investors that he is currently communicating with government departments to obtain support; in addition, he is also obtaining a loan of 100 million yuan from Shizuishan bank through coordinating land mortgage procedures.

According to the financial statements of the first three quarters of 2020 provided by Yuangao group, from January to September 2020, affected by the epidemic situation, Yuangao groups operating revenue was 3.772 billion yuan, a year-on-year decrease of 20.45%, an operating profit of 508 million yuan, a year-on-year decrease of 29.03%, and a net profit of 391 million yuan, a year-on-year decrease of 27.48%.

In addition, from 2018 to 2019 and from January to June 2020, the operating net cash flow of Yuangao Group continued to decline, which were 1.040 billion yuan, 616 million yuan and 60 million yuan respectively; at the end of 2018-2019 and the end of June 2020, the monetary capital scale of Yuangao Group continued to decline, reaching 889 million yuan, 666 million yuan and 463 million yuan, respectively, and the operating cash earning ability continued to decline.

Dagong believes that the short-term debt burden of Yuangao group has increased, and the cash earning ability of its operation has continued to decline. Moreover, the ownership problem of Huadian real estate, the indirect controlling shareholder of Yuangao group, leads to unclear equity structure of Yuangao group, which may have certain impact on the financing and operation activities of Yuangao group in the future. Therefore, Dagong decided to maintain the credit rating of Yuangao groups main body AA, maintain the credit rating of 16 ningyuangao a +, and maintain the credit rating of 18 Yuangao 01, 19 Yuangao 01 and 19 Yuangao 02, and put the subject of Yuangao group and the above debts into the credit watch list.

On November 24, Dagong international lowered the main body of Yuangao group and related debts to C.

Judicial intervention on credit enhancement assets

In the first half of 2020, the export business will decrease significantly. On November 26, Zhang Yujun, deputy general manager of Yuangao group, introduced the operation to investors.

According to the above-mentioned report of Dagong international, Yuangao group mainly operates in three major sectors: first, wind tower and steel structure plate. The companys sales area is still mainly distributed in Northwest China. The wind tower and steel structure customers are highly concentrated and highly dependent on a single customer. The distribution of wind resources in China has obvious regional characteristics, mainly located in Inner Mongolia, Northeast China, Xinjiang and Gansu. The companys factory is located in Yinchuan. Due to the characteristics of large volume and weight, the transportation radius is generally 800-1000 km. In 2019, the main customers are the main engine plants in Northwest China such as Shanxi, Inner Mongolia, Qinghai and Ningxia. In 2019, the sales of the top five customers of the companys wind tower and steel structure business accounted for 46.29%, with high concentration. The sales of Shandong CRRC Wind Power Co., Ltd. and Huadian Heavy Industry Co., Ltd. accounted for 13.65% and 8.75% respectively.

Second, copper powder plate: the company owns three copper mines and one contracted mine. Its own copper ore grade is relatively high, and all copper mines are underground mines, which increases the mining and safety management costs; in 2019, due to the decline of copper price, the companys copper powder production and sales volume will decrease more; the downstream customer concentration of copper powder is still very high.

Third, the emery plate. The company has four emery mines, which is the largest natural emery miner in Shanxi Province. The downstream market demand of emery is large, and the production and sales rate of products are very high. Due to environmental protection inspection in 2019, the production and sales volume will decline.

For the next step of disposal after default, Huaxi Securities, the lead underwriter, said to investors that it would actively urge the issuer to repay, strive to contact the actual controller Gao Hongming, hold a bond holder meeting in time, and conduct judicial intervention on the 18 yuan Gao 01 credit enhancement assets.

Huaxi Securities said that if the assets under the names of Gao Hongming and Hao Fengxian are sealed up, it will have a great impact on their family property. Therefore, it also hopes to get in touch with the actual controller as soon as possible and make further communication with investors in a timely manner.

As of November 27, a number of investors, including Xu Lang, were still unable to get in touch with the actual controller Gao Hongming, and were still on the way of debt collection. The economic observer will also continue to monitor the progress of the event.

(at the request of the interviewee, Xu Lang is an alias)