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Special topic: Bankruptcy and reorganization of Jinke Shares, with the stock price falling by the limit after resumption of trading
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On April 22, according to the National Enterprise Bankruptcy Reorganization Case Information Network and the announcement of the Fifth Intermediate People's Court of Chongqing, on February 21, 2024, the applicant Jinke Real Estate Group Co., Ltd. applied to the Court for bankruptcy reorganization on the grounds that it was unable to pay off the due debts and was obviously lack of solvency. On April 22, 2024, the Court made a civil ruling (2024) Yu 05 Po Shen No. 129, ruling to accept the bankruptcy reorganization application of the applicant Jinke Real Estate Group Co., Ltd.
So far, Jinke has become the first large-scale nationwide listed real estate enterprise in A-share market that has officially entered the restructuring process in recent years.
The court accepted the restructuring application of Jinke Shares
With reorganization value and possibility of rescue
Jinke Shares announced that on April 22, 2024, the Company and Chongqing Jinke received the Civil Rulings ((2024) Yu05 Boshen No. 129 and (2024) Yu05 Boshen No. 130) sent by the Fifth Intermediate People's Court, and the Fifth Intermediate People's Court ruled to accept the reorganization application of the Company and Chongqing Jinke.
According to the court ruling, on February 21, 2024, the applicant Jinke Shares applied to the court for bankruptcy reorganization on the grounds that it could not pay off its due debts and was obviously lack of liquidity. The Court organized a hearing on April 10, 2024. Most creditors attending the hearing expressed their support for the restructuring of Jinke shares.
According to the facts ascertained by the Court, Jinke Shares is an enterprise legal person with the qualification of bankruptcy subject. Jinke Shares has been unable to pay off its due debts. Although its book assets are larger than its liabilities, its existing working capital is seriously insufficient and its main assets are difficult to realize. It can be recognized that it is obviously lacking in liquidity.
As a well-known listed real estate company in China, Jinke has experience in real estate development and construction, high-quality operation management team, and high brand influence. Its main real estate development and construction business has sustainable operating value. Therefore, Jinke shares have restructuring value. Through bankruptcy reorganization, Jinke Shares can gain new opportunities, which is conducive to the win-win situation of debtors, creditors, investors, employees and other parties and the effective use of social resources. Therefore, Jinke shares have the necessity of restructuring. In combination with the restructuring plan and feasibility analysis report submitted by Jinke Shares, Jinke Shares proposed a plan to classify its subsidiaries and resolve their debts as a whole, which has certain feasibility. Therefore, Jinke shares have restructuring value and the possibility of rescue.
To sum up, the restructuring application subject of Jinke Shares is qualified, has bankruptcy reasons, has restructuring value and the possibility of rescue. After discussion and decision by the Judicial Committee of the Court, in accordance with the provisions of Article 2, paragraph 1, Article 7, paragraph 1, Article 70, paragraph 1, and Article 71 of the Enterprise Bankruptcy Law of the People's Republic of China, and the provisions of Article 1, paragraph 1, Article 2, and Article 4, paragraph 1 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Enterprise Bankruptcy Law of the People's Republic of China (I), The ruling is as follows: accept the bankruptcy reorganization application of Jinke Real Estate Group Co., Ltd.
Jinke Shares also said that because the company was ruled by the court to accept reorganization, according to the Shenzhen Stock Exchange Stock Listing Rules (hereinafter referred to as the "Listing Rules"), the company's shares were suspended for one day on April 23, 2024, and since the resumption of trading on April 24, 2024, the delisting risk warning was implemented. The stock abbreviation was changed to“ *ST Jinke ”The stock code is still "000656", and the daily rise and fall of the stock price is limited to 5%. Except for the accepted reorganization, the company has no other delisting risk warnings. After the reorganization is completed, the company will apply to Shenzhen Stock Exchange for cancellation of delisting risk warnings, and the company's shares will resume normal trading after approval. The Company and all members of the Board of Directors guarantee that the information disclosed is true, accurate and complete, and there are no false records, misleading statements or major omissions.
After the resumption of trading on April 24, Jinke shares fell to the limit of 1.14 yuan, with a total market value of 6.087 billion yuan.
He once said that he would not evade debts through bankruptcy reorganization
Lawyer: If reorganization fails or liquidation is faced
It took nearly 9 months for Jinke Shares to apply to the court for reorganization and pre reorganization on its own initiative since the announcement was issued on August 1, 2023, and now it has been accepted by the court.
In the announcement at that time, Jinke Shares said that restructuring and pre restructuring could effectively avoid further deterioration of the company's debt risk and operational risk, introduce restructuring strategic investors, optimize the corporate governance structure, help the company recover profitability as soon as possible, and return to the track of sustainable development.
In fact, before Jinke took the initiative to apply for reorganization, creditors had applied for reorganization of the company. On May 22, 2023, Chongqing Duanheng Construction Engineering Co., Ltd. (hereinafter referred to as Chongqing Duanheng) applied to Chongqing Fifth Intermediate People's Court for restructuring of Jinke Shares because about 27.915 million yuan of commercial bills had not been fulfilled on time and had been overdue for a long time.
This restructuring application attracted questions and inquiries from Shenzhen Stock Exchange, requiring Jinke Shares to check and explain whether there is a relationship between the two parties. Chongqing Duanheng asked the court whether the restructuring was driven by Jinke Shares, and whether Jinke Shares evaded or abandoned debts through bankruptcy restructuring and damaged the legitimate rights and interests of creditors and minority shareholders.
Jinke Shares denied this one by one and said that "the company has no intention of evading debts through bankruptcy reorganization".
Image source: Visual China
Wang Yuchen, director of Beijing Jinsui Law Firm, pointed out in every interview that restructuring and debt rollover are two different strategies for enterprises when facing financial difficulties. Reorganization is one of the bankruptcy legal processes, which should be carried out in strict accordance with the above processes. The debt rollover is to postpone the debt repayment period so that enterprises have more time to raise funds.
In Wang Yuchen's opinion, the reason why Jinke chose restructuring rather than debt rollover may be that the company's financial situation is not optimistic and needs a more thorough solution. Reorganization is usually the last resort when the enterprise cannot solve the financial crisis by other means. Compared with debt rollover, restructuring may have a greater and more far-reaching impact on the structure and operation of the enterprise, including the possible handover of certain management rights, major changes in shareholders, asset sales, business adjustment, major changes in management, etc. After the successful reorganization, the enterprise may obtain new investment and return to the right track; However, if reorganization fails, the enterprise may face bankruptcy liquidation. After the failure of the extension, there are relatively more options, even reorganization.
According to the Beijing News, it is noteworthy that the intended participants in the restructuring of Jinke Shares have emerged. As early as the end of June last year, Jinke signed the Strategic Investment Framework Agreement with Great Wall Guofu Real Estate Co., Ltd. At that time, Jinke Shares said in the announcement that if Jinke Shares entered the pre reorganization or reorganization process, Great Wall Guofu and/or its designated affiliated entities were willing to participate in the competitive selection as strategic investors in the stage of public recruitment of strategic investors.
According to public data, Great Wall Guofu Real Estate Co., Ltd. is the flag of AMC Great Wall Asset Management Co., Ltd (Analyst Jin Qilin) It is an investment and operation platform focusing on real estate development and operation. In addition, according to insiders, at present, Great Wall Guofu Real Estate Co., Ltd. is interested in participating in the pre restructuring process of Jinke Shares as a restructuring investor. Both parties have jointly established a working group, established a coordination and contact mechanism, and completed on-site due diligence.
Annual sales exceeded 200 billion yuan
Loss in recent two years exceeded 26 billion yuan
Jinke is a typical representative of Yupai real estate enterprises. It has been more than 20 years since its establishment. Since it entered the threshold of 100 billion yuan in 2018, it has developed rapidly. By 2020, the company's contracted sales have exceeded 200 billion yuan, and it has become the top array of national real estate enterprises from a regional real estate enterprise.
According to previous planning of Jinke, by 2025, the sales scale of Jinke will reach more than 450 billion yuan. However, in the past two years, as the whole real estate industry has entered a period of deep adjustment, Jinke shares are also facing a decline in sales and an increase in losses year by year, falling into a debt dilemma.
After 2020, the sales of Jinke Shares have declined for three consecutive years, reaching 187.6 billion yuan in 2021, 68.1 billion yuan in 2022, and only 21.8 billion yuan in the first three quarters of 2023 according to the latest disclosure.
In the past two years, Jinke shares have also fallen into huge losses. In 2022, the net profit loss will be 21.39 billion yuan, down 694.13% year on year. It is estimated that the net profit loss attributable to the parent company will be 4.8 billion yuan to 7.8 billion yuan in 2023, and the total net loss in the two years will exceed 26 billion yuan. By the end of the third quarter of 2023, the total assets of Jinke Shares were about 260 billion yuan, and the total liabilities exceeded 220 billion yuan.
According to the announcement issued by Jinke Shares on April 20, up to now, in addition to the disclosed litigation and arbitration cases, the Company and its holding subsidiaries have received new lawsuits The total amount of arbitration cases was 2.223 billion yuan (the above litigation and arbitration cases involved financial loan contract disputes, construction project construction contract disputes, commercial housing sales contract disputes, joint venture and cooperation contract disputes, labor disputes and other types), accounting for 17.86% of the company's latest audited net assets. Among them, the case brought by the company as the plaintiff involved 13 million yuan; The case that the company was sued as a defendant or a third person involved an amount of 2.21 billion yuan. Among the new cases received by the Company and its holding subsidiaries, the total amount of cases entering the implementation phase was RMB 0.7 billion, accounting for 0.06% of the Company's latest audited net assets.
Enterprise investigation data shows that in addition to bankruptcy and reorganization, there are 3953 risk information under the name of Jinke Shares, such as dishonest executors, executors, restrictions on high consumption, non performance of final cases, property preservation, judicial auction, equity freeze, etc.
Huang Hongyun, the actual controller of Jinke, has also become a dishonest executor and has been restricted to high consumption. In 2020, he was also listed in the Hurun Global Rich List with a wealth of 15 billion yuan.
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