Country Garden, emergency response
Country Garden’s response came.
On June 5th, in response to the news that its Country Garden Venture Capital may sell the equity of Changxin Storage, a memory chip manufacturer, thus raising 2 billion yuan, Country Garden responded to a reporter from China, a brokerage firm, saying that the company is actively considering various strategies aimed at optimizing the asset-liability structure, including carefully evaluating the asset portfolio and exploring potential asset disposal opportunities.
Country Garden is still in difficulties. Due to the failure to publish the 2023 annual report on schedule, Country Garden has suspended trading since April this year. At the same time, Country Garden is also facing a debt liquidation hearing. At present, the Hong Kong High Court has ordered that the petition hearing be postponed until June 11.
Respond to the sale of Changxin Storage Equity.
Country Garden, which is in trouble, heard the news of disposing of assets.
Some foreign media reported that Country Garden Venture Capital, a subsidiary of Country Garden, is seeking to sell its shares in Changxin Storage Technology Co., Ltd. (referred to as "Changxin Storage"), raising about 2 billion yuan. However, the sale time is still under negotiation, and the final result is inconclusive.
According to official website, Changxin Storage is an integrated memory manufacturing company, focusing on the design, research and development, production and sales of dynamic random access memory chips (DRAM). It is a competitor of Micron Technology and Samsung Electronics. Changxin Storage was founded in 2016. Changxin Storage is headquartered in Hefei, Anhui, and has several R&D centers and branches at home and abroad.
In response to the above news, Country Garden insiders told China, a brokerage firm, that the company is committed to actively exploring various strategies to optimize the asset-liability structure, including prudent assessment of the asset portfolio and potential asset disposal opportunities.
"If there is any substantial progress or specific decision, we will disclose it to the market in a timely manner in accordance with relevant regulations." The above insiders said.
According to Tianyancha information, Country Garden holds 1.6805% of the shares of Changxin Technology Group Co., Ltd. (hereinafter referred to as "Changxin Technology") through the equity investment partnership (limited partnership) of No.5 Huibi, Nanhai District, Foshan City under Country Garden Venture Capital, and the latter holds 100% of the shares of Changxin Storage.
In March this year, the listed company Zhaoyi Innovation (603986.SH) announced that it planned to make a strategic capital increase of 1.5 billion yuan for Changxin Technology. After the capital increase is completed, Zhaoyi Innovation will hold about 1.88% of the equity of Changxin Technology. Before this capital increase, Zhaoyi Innovation held about 0.95% equity of Changxin Technology, which also indicated that the valuation of Changxin Technology may increase from the previous 139.982 billion yuan to 161.29 billion yuan, and Country Garden held more than 2 billion yuan.
Country Garden seeks to save itself from difficulties.
In fact, due to its predicament, it is not surprising that Country Garden sold its equity to cash in funds to save itself.
On June 5th, Country Garden announced that in May this year, the contracted sales attributable to shareholders’ equity of the Company reached 4.29 billion yuan. The contracted sales floor area attributable to shareholders’ equity of the Company is 440,000 square meters.
In the first five months of this year, Country Garden realized the contracted sales attributable to shareholders’ equity of the Company of 21.65 billion yuan, down 80.8% from 112.76 billion yuan in the same period of last year; The contracted sales floor area attributable to shareholders’ equity of the Company was 2.251 million square meters, down 84.39% from 14.42 million square meters in the same period of last year.
On May 13th this year, at the monthly management meeting of Country Garden, Yang Huiyan, chairman of the Board of Directors of Country Garden, said that although the company was experiencing market tests, its balance sheet remained relatively healthy. She revealed that the Group is actively optimizing its asset structure and reducing financial risks to ensure that it can quickly seize opportunities when the market recovers.
Yang Huiyan also said that the policy is gradually improving. As long as we persist in the trough, the real estate industry will surely usher in spring.
Country Garden announced on the Hong Kong Stock Exchange in March this year that it is expected that it will take longer to complete the preparation of the consolidated financial statements for 2023, and it will not be able to publish the annual results for 2023 on schedule. In view of this, Country Garden has been suspended since the beginning of April this year.
Country Garden will also face a liquidation hearing. The petitioner, Ever Credit Limited (Jiantao Group), filed a liquidation petition with the High Court of Hong Kong in February this year due to the unpaid term loan and emergency interest of about HK$ 1.6 billion, and the first hearing was held on May 17.
In May this year, after the two parties went to court, Country Garden applied for an adjournment to prepare more evidence. The two sides subsequently agreed to postpone the case until June 11th.
Editor: Tactical constancy
Proofreading: Li Lingfeng