Guiren Bird is on the verge of bankruptcy and may be at risk of delisting. (Photo source: Internet)
On March 9, the reorganization progress announcement issued by Guiren Bird Co. showed that as of March 5, 163 creditors had declared their claims to the administrator, totaling RMB 4.093 billion. Guiren Bird also issued a risk alert, the court has ruled that Guiren Bird has entered into the reorganization process, but there is still a risk of being declared bankrupt due to the failure of the reorganization, and if Guiren Bird is declared bankrupt, the company’s shares will face the risk of delisting.
The financial report shows that in the first three quarters of 2020, Guiren Bird achieved operating income of 847 million yuan, a decline of 27.57% over the same period of the previous year, and net profit attributable to shareholders of the listed company lost 259 million yuan, a further increase in the amount of loss year on year.
On January 28, Guiren Bird disclosed the announcement of 2020 performance pre-loss, due to the Epidemic, intensified market competition, debt default and further combing of terminal sales channels and other factors, Guiren Bird expected 2020 net profit of about 379 million yuan, deducting non-net profit of about -416 million yuan.
In addition, Guiren Bird currently has several executee information, and the total amount executed so far has exceeded 200 million. The company’s legal representative, Lin Tianfu, has been restricted from spending.
Guiren Bird Co., Ltd. was established in July 2004, invested by Hong Kong businessman Lin Tianfu, introduced foreign production lines and plant planning concepts, and operated shoes and garments. Ten major shareholders information shows that Guiren Bird Group (Hong Kong) Limited is the largest shareholder, holding 66.2% of the shares.
Focusing on Hong Kong-style marketing concept, Guiren Bird invited famous Hong Kong stars Andy Lau and Cecilia Cheung as brand image spokespersons to make a name for itself in mainland China, and became a strategic partner of the International Association of Athletics Federations in East Asia and a strategic partner of the Small Ball Sports Management Center of the State General Administration of Sports of China in 2005.
In 2014, Guiren Bird was listed on the Shanghai Stock Exchange and was sought after by the sports market and capital at the Time, with a market value of 42.7 billion yuan in just one year. in 2015, Lin Tianfu became the richest man in Quanzhou with a fortune of 19 billion yuan, ranking 108th in the country.
After going public, Lin Tianfu was no longer satisfied with producing and selling sports shoes and apparel, and began to enter the network and sports industry.
In 2015, Guiren Bird spent 240 million yuan to enter Huhuo and 200 million yuan to invest in Kangpaisi Sports. 2016, Guiren Bird took the exclusive operating right of AND1, held the offline retailer Jiezhixing and the network distributor Famous Shoe Bank, and acquired 45.45% of Shengdao Sports with the name of Jiezhixing. In the same year, it also spent $100 million to acquire StarYou Technology Game Company.
Between 2014 and 2017, Guiren Bird completed more than ten acquisitions, with industries spanning Internet + sports, sports brokerage, event hosting, sports insurance, sports games, sports fitness, etc., putting a huge sum of 4.6 billion yuan into capital operations.
However, these investments did not bring the expected returns, and its wholly-owned acquisition model has added to the financial burden of Guiren Bird. Under the huge financial pressure, Guiren Bird financed by selling non-main business assets, equity pledges and other means. Up to now, 66.20% and 1.67% of the equity held by the company’s major shareholders, Guiren Bird Group (Hong Kong) Limited and Guiren Bird Investment Limited, respectively, have all been pledged.
In 2017, Guiren Bird’s net profit attributable to the parent fell to 157 million yuan, and in 2018, it lost 686 million yuan for the first time since its listing, and 1.096 billion yuan and 379 million yuan in 2019 and 2020 (performance forecast), respectively.
Since 2018, Guiren Bird began to get into debt trouble and hit the delisting risk warning line. on May 6, 2019, Guiren Bird changed to *ST Guiren Bird. As of now, the market value of Guiren Bird has gone from over 40 billion yuan at its peak to less than 1.6 billion yuan today.
Due to tight liquidity, Guiren Bird has been unable to repay its PPN and bank loans. At present, the principal amount of the company’s loans with various banks totaling 1.410 billion yuan are all overdue.
Explanation of terms: PPN, abbreviation of private placement note, translates as “non-public directed debt financing instrument” in Chinese, refers to non-financial enterprises with legal personality, issuing debt financing instruments to specific institutional investors in the interbank market, and within the scope of specific institutional investors PPNs are bonds that are negotiable and transferable within the scope of specific institutional investors. Simply put, PPN is a kind of private placement bond in the interbank market, which is generally underwritten by commercial banks or a few large securities companies in mainland China.