Author: Lulu
Source: GPLP Rhino Finance (ID:gplpcn)
On July 23, the Shanghai Stock Exchange disclosedZhengrong Real Estate (06158.HK)The announcement of issuing bonds. Zhengrong Real Estate plans to issue the first phase of 1 billion yuan of corporate bonds in 2020.
Source: Zhengrong Real Estate announcement
According to the announcement, the total amount of bonds issued is no more than 1 billion yuan and is divided into two categories. The bond type one is four-year, with the issuer's option to adjust the coupon rate at the end of the second year and the bondholder's option to sell back. The inquiry range of the coupon rate is 4.2% Murray 5.6%.
The second type of bond has a five-year term, with the issuer's option to adjust the coupon rate at the end of the third year and the bondholder's option to sell back. The inquiry range of the coupon rate is 4.8% and 6.2%.
With regard to the purpose of raising funds, Zhengrong Real Estate said it was intended to repay corporate bonds.
It is worth noting that Zhengrong Real Estate just spun off its property management business a week ago.Zhengrong Service (06958.HK)Listed in Hong Kong, raising HK $1.072 billion.
In addition, Zhengrong Real Estate has issued bonds at high interest rates many times since 2020.
According to statistics, in January, Zhengrong Real Estate issued a $290 million preferred note due in 2024 at an annual interest rate of 7.875%. On February 19th, Zhengrong Real Estate issued a $200m preferred note maturing in 2021 at an annual interest rate of 5.6%. Zhengrong Real Estate announced the issue of $200 million in 2024 preferred notes with an annual interest rate of 8.35%. In June, Zhengrong real estate announced the issuance of $200 million in preferred notes due in 2023 at an annual interest rate of 8.3%.
Without exception, the main purpose of issuing bonds is to repay existing debts.
According to Zhengrong Real Estate's financial report in 2019, the total debt of Zhengrong Real Estate was 138.159 billion yuan at the end of 2019. Of this total, current liabilities are 96.446 billion yuan, accounting for 69.8% of the total liabilities, about 3 times the size of revenue.
In addition, the operating cash flow of Zhengrong Real Estate has deteriorated. In 2019, the net operating cash flow was-14.064 billion yuan. Although with financing activities, Zhengrong Real Estate generated a net cash flow of 21.973 billion yuan, but the money will be repaid sooner or later.
It can be seen that the money raised by Zhengrong Real Estate spin-off property listing is far from enough to repay its debts, so it has to issue bonds at high interest rates to raise funds to repay debts.