The largest urban investment company in Zunyi reorganized bank loans and was accused of formal default

[January 07, 2023](Comprehensive report by Li Siqi, a reporter from the Epoch Times special department) “Zunyi Road Bridge” published on December 30 last year about the restructuringBank loanannouncement, becoming China’s first bank loan restructuringCity investment company. This is called “formal repudiation” by professionals. This restructuring is backed by documents from the Chinese Communist Party’s State Council and the Ministry of Finance, involving a debt scale of 15.594 billion yuan (about 2.2 billion U.S. dollars).

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“Zunyi Road Bridge” is the abbreviation of Zunyi Road and Bridge Construction (Group) Co., Ltd., which is a subsidiary of Zunyi City, Guizhou ProvinceCity investment companyits wholly-owned controlling shareholder is the Zunyi Municipal State-owned Assets Supervision and Administration Commission of the Communist Party of China, and the ultimate controller is the Zunyi Municipal Government of the Communist Party of China.

Chengtou Company is the abbreviation of Urban Construction Investment Company, which is the investment and financing platform of the local government of the Communist Party of China. It started in 1991. In short, urban investment companies are functional agencies of the local government of the Communist Party of China, and their business sectors usually include urban infrastructure construction, engineering construction, real estate sales and land business.

The announcement stated that thisBank loanThe reorganization is based on the preservation of creditor’s rights, and the debt scale is 15.594 billion yuan. According to the reorganization agreement, after the reorganization, the bank loan term is adjusted to 20 years, and the interest rate is adjusted to 3% to 4.5% per year. In the first 10 years, only interest is paid without repaying the principal, and in the next 10 years, the principal is repaid in installments.

debt reorganizationThe basis is the “Guo Fa ‘2022’ No. 2” document issued by the State Council of the Communist Party of China, and the “Cai Yu ‘2022’ No. 114″ document issued by the Ministry of Finance of the Communist Party of China. sustainable development”.

postingdebt reorganizationTwo weeks before the announcement (December 16), “Zunyi Daoqiao” once again issued a related announcement listed as the executor, and announced that a new information about the person subject to execution will be added on December 2 and December 7, 2022. , the enforcement courts are all Zhengzhou Intermediate Courts, and the execution targets are approximately 103 million yuan (approximately US$14.4 million) and 417 million yuan (approximately US$58.4 million).

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This is the fifth announcement that Zunyi Daoqiao has been listed as an executor since it released its bond interim report on August 31, 2022. China Securities Pengyuan Credit Rating Co., Ltd. stated that as of December 15, 2022, “Zunyi Daoqiao” has a total of 158 information on persons subject to execution.

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The bond interim report of “Zunyi Daoqiao” shows that the company has serious debts and has been included in the credit watch list: as of the middle of 2022, the balance of bank loans is 16.448 billion yuan (about 2.3 billion U.S. dollars), accounting for 3.587 billion of the balance of interest debt. %; loans from non-bank financial institutions were 7.283 billion yuan (about 1.02 billion U.S. dollars), accounting for 15.88% of the balance of interest-bearing debts; the balance of other interest-bearing debts was 2.456 billion yuan (about 340 million U.S. dollars), accounting for 5.36% of the balance of interest-bearing debts.

According to the interim report, considering the debt pressure of “Zunyi Daoqiao”, the records of multiple persons subject to enforcement, and the occurrence of non-standard cases in the guaranteed objectsbreach of contractetc., and revised the rating outlook from stable to negative. At the end of the interim report, there were interest-bearing debts with an overdue amount of more than 10 million yuan (about 1.4 million U.S. dollars).

The so-called “non-standard” refers to “debt assets that are not traded in the inter-bank market and the stock exchange market”, including but not limited to credit assets, trust loans, entrusted claims, acceptance bills, letters of credit, accounts receivable, various Beneficiary (receipt) rights, equity financing with repurchase clauses, etc.

The well-known financial blogger “Financial Truth” believes that Zunyi Daoqiao’s bank loan handling method is tantamount to “official default”, and will become a model for other CCP local governments in the future to “learn how to reduce debt”, but “this way of guaranteeing banks to abandon non-standard There will be the worst blowback.”

“Financial Truth” said that the debts of urban investment companies are much larger than those of the real estate industry. Banks can extend your period under the pressure of the government, but what about non-standard financing? Non-standard cannot accept this kind of extension, and doing so by “Zunyi Daoqiao” is equivalent to blocking its own way of financing in the future.

He believes that the fundamental reason is that the Zunyi Municipal Government invests indiscriminately, and the city investment company has long relied on government investment; the direct reason is that the land finance is poor, and the government itself has no money to subsidize Chengtou. In 2023, “Zunyi roads and bridges” will appear in all parts of China, because this year’s real estate market will definitely not improve, and land finance will only get worse.

Editor in charge: Lian Shuhua #