Original title: Assisted Goldin Finance Changshi Once Again Became Pan Sutong's “Warrior in White” Source: Opinion Real Estate New Media
Opinion After the resuming of trading of Real Estate Network for a short time, Goldin Financial has once again been suspended. This indicates that Goldin Financial's debt problem is far from being as simple as imagined.
The market is waiting for the latest insider news from Goldin Financial. However, the details have not yet been announced, and market news is constantly fermenting, including Changshi or becoming Goldin Financial's White Warrior to help them get through difficult times.
The message was not verified, but Changshi provided a relevant response. Ma Lizhi, member of the Changshi Executive Committee and general manager of the Corporate Business Development Department, responded to media statements that he would actively study Goldin's financial situation and debt situation.
This is also reflected in a recent personnel appointment announcement issued by Goldin Financial. On July 22, Goldin Financial announced that Ma Lizhi has been appointed as the company's vice chairman and independent non-executive director, all effective July 23, 2020.
According to the announcement, he will focus on providing financial and restructuring consulting assistance to Goldin Financial and its subsidiaries.
Whether Goldin Financial will finally get long-term help is still unknown, but at least, both sides have taken the first step.
implicating
Currently, Goldin Financial's high debt is a problem that needs to be solved urgently in Changshi.
According to the information disclosed on July 15 alone, Goldin Financial and several direct and indirect subsidiaries have each received several notices regarding certain debts owed by Ciyu Limited, Chengmei Holdings Limited and Goal Eagle Limited. Among them, it involves Ciyu Limited issuing floating rate preferential mortgage notes with a principal amount of HK$6.8 billion, and that Cheng Mei and Goal Eagle (borrower) were granted a term loan with a total principal amount of approximately HK$1.895 billion from several independent financial institutions.
But these debts should only be the tip of the iceberg. The problems faced by Goldin Finance are the sequelae of “lack of money” left by the previous land grab with high leverage.
According to the data, as of December 31, 2019, Goldin Financial's working capital was approximately HK$5.217 billion. The total amount of cash and cash equivalent and secured bank deposits was approximately HK$2.55 billion. However, as of the end of 2019, Goldin Financial's interest-bearing bank and other loans were approximately HK$15.483 billion, with a debt-to-total asset ratio of 41.4%.
Insolvency is the current state of Goldin Finance. In order to change this situation, Goldin Financial is also trying its best to return funds.
The first is the land sale operation. Following the “exit from Kai Tak” last year, Goldin Financial sold land No. 4 in Area 4B of Kai Tak. The sale plan started as early as March of this year. After two months, Goldin Financial finally sold for HK$7.04 billion. The buyer was Top Family Group Limited, and the net proceeds will be used for loan repayment and general working capital.
The second is to seek new financing of around HK$8.7 billion, but this funding is still uncertain.
Another way to fill the funding gap is to bring in samurai in white, which can quickly fill in the gaps. Obviously, Goldin Financial is bringing in Changshi this time.
This is not the first time that Changshi has helped Goldin Finance. Two years ago, Pan Sutong mortgaged Goldin Financial International Center under Goldin Finance to a company owned by Changshi and obtained a loan of about HK$10.23 billion. At that time, the loan would be used to repayIndustrial and Commercial Bankloans.
At the time of the deal, Smart Edge signed a loan agreement with another company, Winchesto Finance. Among them, Smart Edge is privately held by Goldin and Pan Sutong, respectively; Winchester holds 99.99% of the shares by Paola Holdings Ltd. The directors include Changshi Group Chairman Li Zeyi, and Paola's ultimate owner is Changshi.
As of June 30, 2018, the total asset value of Goldin Financial Global Center was HK$17.2 billion. The HK$10.2 billion financing at the time was calculated to have secured approximately 60% of the interests in the underlying property.
In Changshi's 2018 semi-annual report, this HK$10.23 billion “short-term receivable loan” was included in the account. The interest rate on this loan is about 8% per annum.
As far as Changshi is concerned, this transaction can earn high interest returns; it is basically a business with a steady profit without loss. In April 2019, it was reported that Goldin Financial had repaid the long-term loan.
Although this financing plan was not fully disclosed publicly, it has also attracted the attention of the market. It has long been stated in the industry that this kind of transaction may not only be a commercial loan, but that there may be strategic cooperation between the two parties; however, some agreements have not been disclosed to the outside world.
Perhaps we can see from Changshi's appearance this time that there are still related interests between Changshi and Goldin.
interests
Even though Goldin and Changshi are often rivals in land battles in Hong Kong, the interests of merchants are important, and Changshi will definitely not miss the fact that they can make money.
However, whether it can help Goldin Finance overcome the debt crisis this time also depends on Goldin Financial's specific debt and cash flow situation.
Furthermore, Changshi has sent representatives in this time, which shows that the current debt problem of Goldin Financial may not be solved by simply providing a 10.2 billion Hong Kong dollar loan; it should be quite complicated.
Earlier, some people in the industry said bluntly that it is not easy to revive Goldin Financial's assets; they can only find a restructuring party. “Ultimately, it also depends on how intermediaries and creditors can eventually find ways to revitalize their assets; otherwise, it will only drag on.”
Meanwhile, Ma Lizhi, a member of the Executive Committee of the Changjiang Group and general manager of the Corporate Business Development Department, is 52 years old. He has accumulated more than 30 years of experience in business management in various industries.
According to data, Ma Lizhi holds a bachelor's degree in finance and a master's degree in global business management. He is currently a member of the Caritas Hong Kong Hotel and Restaurant Service Committee. He is also a member of the Advisory Committee of President's Circle, the University of British Columbia, Canada, its Faculty of Arts, and its School of Business.
He is also a non-executive director of Zhifu Asset Management Co., Ltd., the manager of Zhifu Real Estate Trust (listed in Hong Kong) and Prosperity Asset Management Co., Ltd., the manager of Prosperity Real Estate Trust (listed in Hong Kong). Ma Lizhi also served as a replacement director for Lai Kai-ming, a non-executive director of Hutchison Telecom Hong Kong Holdings Limited (listed in Hong Kong).
It is easy to see from his past experience that Ma Lizhi has extensive experience in trusteeship management of equity investment funds, fiduciary investment management, etc. Therefore, Ma Lizhi will play a certain role in Goldin Financial's financial and restructuring consulting.
Ma Lizhi was responsible for the landmark office building 5 Broadgate in the Financial City of London, England, which was purchased by Changshi for 1 billion pounds (about HK$10.54 billion). The building is the location of UBS's London headquarters. However, he is familiar with Changshi's related investments and acquisitions.
However, the announcement revealed that Ma Lizhi did not sign any service contract with Goldin Financial, but according to Goldin Financial's corporate rules, he must withdraw and be re-elected at the next Annual General Meeting of Shareholders of the Company. He is entitled to receive the company's remuneration of HK$0.24 million per year.
Ma's motivational attitude is probably just an introduction. Whether the future will bring financial help to Goldin Financial is the focus of attention next.
In fact, it is not uncommon for a long time to invest as a financial institution. Early reports in Opinion Real Estate's new media show that in 2017, after Changshi Group sold 75% of its interest in the Central Central Center for HK$40.2 billion, in addition to continuing to invest in the utility industry in the UK, Australia, etc., the funds cashed out also acted as lenders when the market lacked capital, and lent at a high interest rate of 8% or more to Chinese or other underfunded institutions.
According to industry insiders' analysis, Hong Kong real estate agents generally have very low leverage and can obtain more credit from banks.
However, there is currently no way to discuss how Changshi will save Goldin Finance, whether it is simple financial help or restructuring, and it is still impossible to determine whether it will help.