On Monday evening, China’s Yurun Food announced that only two of its subsidiaries, Nanjing Yurun and Anhui Fureun, are involved in the restructuring of Yurun Group, but the recruitment of investors for the restructuring has not yet started and no investors have been appointed.
Reuters reported on Feb. 2 that Yurun Food said that the administrators of Nanjing Yurun and Anhui Fureun confirmed that the audit and evaluation of the reorganization is still underway and that the reorganization plan has not yet been determined.
Caixin reported on Jan. 29 that the bankruptcy restructuring of the Yurun system has made new progress, with 7 core non-listed Yurun companies entering the bankruptcy restructuring process, with audits and assessments still underway and estimated to be completed after the Chinese New Year.
The seven companies mentioned above are the core non-listed enterprises of Yurun, covering three sectors: food, logistics and real estate.
According to Caixin, nearly 100 banks, trust companies and corporate creditors previously declared claims of more than 70 billion yuan, but as of the day of the first creditors’ network meeting held on Dec. 30, 2020, less than half of the bonds had been confirmed.
Caixin reported that on January 6, PUTO Investment had formally submitted an application letter as an overall investor of Yurun Group, proposing a restructuring plan of “industrial capital + financial capital”, i.e., introducing investors with strong industrial and financial strength, including large central enterprises, to form a restructuring consortium to resolve financial risks while At the same Time, the industry will remain in Jiangsu.
According to public information, as a professional investment management institution, Putuo Investment is mainly engaged in investment holding, fund and asset management, investment banking, and has taken the lead in the mixed restructuring of large central enterprises such as AVIC, China Huadian, and other large private enterprises and investment cooperation, with hundreds of billions of yuan in investment holding/holding enterprise assets.
However, it has no precedent of operating bankruptcy restructuring of tens of billions of dollars, so it remains to be seen whether it can successfully participate in the subsequent.
Founded in 1993, Yurun Holdings Group is headquartered in Nanjing, and currently has two listed companies, Yurun Food and Nanjing Zhongshang.
Yurun Food is one of the largest meat producers in China, but its operations go beyond the food industry. After continuous acquisitions, it has officially become a comprehensive group spanning real estate, logistics, food, tourism and construction, and in 2012, with sales of 110 billion, it officially became a member of the 100 billion private enterprise club.
According to Interface News, the continuous expansion of Yurun Group has also laid a hidden danger for the future debt crisis.
As a food company, Yurun Food had a series of negative food safety news around 2011, such as products were detected with “lean meat essence” residue, hair in products, and products were found to contain hormones and disease-causing microorganisms. As a result of this series of events, the founder of Yurun, Zhu Yicai, was pressured to resign from his position as executive director, and Yurun Food’s operating results were affected and its share price plummeted.
During the five years from 2015 to 2019, the accumulated losses of Yurun Food amounted to HK$15.932 billion; in the first half of 2020, the losses were HK$400 million; the gearing ratio reached 141.6%, and the defaulted loans were nearly HK$5 billion.
Since 2018, Central Shopping Mall has turned from profit to loss, with losses expanding to $588 million by 2019; it has been subject to a delisting risk warning in April 2020.
As of the third quarter of 2020, Central Mall’s debt ratio has reached 93.79%, of which current liabilities amount to 13.33 billion yuan, with concentrated risk of short-term debt service pressure; operating cash flow for the same period was -224 million yuan. in January 2021, it announced that it would sell the stores and some floors of the department store to a state-owned enterprise to repay its debts, amounting to about 305 million yuan.
Information from the SkyEye search shows that there are 62 court announcements, 215 legal proceedings, 8 consumption restriction orders, 5 loss of credit information, 188 judicial assistance, and 63 case filings for Yurun Holdings Group Limited, all of which constitute risk information for Yurun.
The debt risk of Yurun Food and Central Shopping Center has been transmitted to Yurun Holdings. According to the financial media “small debt to see the market” statistics, in recent years, the total amount of the final case of Rainrun Holdings, the total amount of the subject of execution is 5.25 billion yuan, the total amount of unfulfilled 5.25 billion yuan, the total amount of Rainrun being executed over the years up to 12.5 billion yuan.
Since 2019, due to the failure to fulfill the legal documents in force, the actual controller of Yurun Zhu Yicai has been restricted from high consumption five times, the applicants include Huaneng Guixin Trust, Cinda Assets, etc.
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