3 Billion 500 Million To 1 Yuan! Jining City Voted To "Abandon The Purchase" Of Shandong Ruyi Or Other Asset Transactions "Blood Transfusion".

The 3 billion 500 million yuan acquisition of the 26% stake has changed to 1 yuan acquisition of 0.01% stake. The story of Jining Urban Construction Investment Co., Ltd. (hereinafter referred to as "Jining city investment") and Shandong Ruyi science and Technology Group Co., Ltd. (hereinafter referred to as "Shandong Ruyi") are still on the stage.

The origin of the matter was in June 1st. Jining city voted said that after consulting with Beijing Ruyi fashion Klc Holdings Ltd (hereinafter referred to as "Ruyi fashion" and Shandong Ruyi controlling shareholder), the two sides decided to change the takeover transaction. The company only retained Shandong's Ruyi 0.01% stake, and the total price corresponding to the stock price was 1 yuan.

In the agreement on equity transfer signed in October last year, Jining city voted for the 26% stake in Shandong, and the corresponding transfer price was 3 billion 500 million yuan.

After seven months, the Jining city voted for Shandong's Ruyi shareholding plan has changed, not to let the market imagine.

After all, when the city of Jining threw a hand in Shandong when it faced a predicament, it still saved Jining. Does Shandong mean losing its backing to the company's future operations?

"Jining city voted to change acquiring company equity trading does not mean that the Jining government's support for our company has changed, or there will be other forms of cooperation to carry out the next support, but the specific situation is not convenient to disclose at present." In June 2nd, Ruyi, a person in Shandong, told the business reporter in twenty-first Century.

Regardless of the final outcome, the company is still in a difficult position for the company known as the Chinese version of LVMH.

"Dramatic" acquisition

It was thought that it was a great success for the city investment company to become a shareholder, but after 7 months, there was a dramatic ending.

In October 2019, Shandong Ruyi said that the Jining city voted has been accepted by Ruyi fashion, Shandong's Ruyi 26% stake, and the share transfer price is 3 billion 500 million yuan. After the completion of the transaction, Jining city voted to become the second largest shareholder of Ruyi in Shandong. Shandong's Ruyi real controller has not changed.

At that time, Shandong Ruyi announcement, Jining city voted to become the second largest shareholder of the company, will help the company to enhance strategic cooperation with high-quality state-owned enterprises, and have a positive impact on the future operation of the company.

Subsequently, Jining city investment provided an irrevocable joint and several liability guarantee for the "15 voluntary debt" issued by Shandong Ruyi.

In October 17, 2019, Jining city voted to issue "letter of guarantee" to the "15 voluntary debt". The Jining city voted as "15 voluntary debt" to provide unconditional and irrevocable joint and several liability guarantee from the fifth year (after the investor returned the sale). The scope of guarantee includes the original size of the "15 voluntary debt" from the fifth year (i.e. after the October 23, 2019 investor returns). Gold and interest arising from the guarantee shall be effective on the date of issuance of the guarantee letter from October 23, 2019 to 15 years after the expiration of the investor's return sale to the expiration date of this bond.

At that time, the stake and guarantee provided by Jining city is a key time node.

Statistics show that the "15 Ruyi debt" was sold back in October 23, 2019, and with the endorsement of the city investment company, it gave Shandong a certain breathing space to avoid default.

But now, the way of Jining's shareholders has stopped abruptly.

It is worth noting that the transfer of 3 billion 500 million yuan equity which was completed in October last year, until June 1st, Jining city investment has not yet paid any share transfer price to Ruyi fashion.

According to the disclosure in June 1st, Jining city voted has returned to Shandong Ruyi 25.99% stake in Ruyi fashion. In May 29, 2020, Shandong Ruyi completed the change of business registration after the above transaction was changed, and the proportion of Shandong Ruyi shareholding held by Yi fashion was changed to 79.48%.

According to the foregoing Shandong Ruyi related personages, "the reason why Jining city voted to change the takeover transaction is that there are other actions to follow in the aspect of city investment. Besides equity purchase, there may be other assets transactions. This time, we will terminate the previous 3 billion 500 million equity acquisition without prejudice to Shandong's willing support. "

"The Jining government's support for Shandong's aspiration will not change." The source said.

"There is no definite announcement now, and everyone is still guessing." An institutional holder of Shandong Ruyi bond told the twenty-first Century business news reporter, "I do not have a guarantee of city bonds, and I need to pay more attention to the situation later."

In twenty-first Century, the economic news reporter found that in the announcement of Jining city investment, no further explanation was given to the follow-up plan for the change of the takeover transaction.

On the same day, the economic news reporters on twenty-first Century contacted Jining city for many times, but they did not receive any reply.

Predicament to be solved

According to the current situation, the capital chain of Shandong is still tense.

In June 15th, Shandong Ruyi is willing to pay interest after 3 months' extension of "19 Ruyi technology MTN001" in March.

Earlier in March, Shandong declared that it had reached an interest deferred payment agreement with all the holders. It agreed that the interest of the "19 Ruyi technology MTN001" will be extended for 3 months to June 15, 2020, and the interest payable will be calculated according to the annualized rate of 7.5% of the current bond interest rate, and the agreement will be completed in accordance with the agreement as scheduled for the 2020 year interest payment of the current bond.

Subsequently, Moodie in the rating report, Shandong Ruyi science and Technology Group Limited company family rating (CFR) from "Caa1" to "Caa3", and will be from Shandong Ruyi guarantee, Sheng Mao Holdings Limited issued the senior unsecured bond rating from "Caa2" to "Ca"; the company's rating outlook to maintain "negative".

"The downgrade reflects Shandong's tightening liquidity position in the wake of economic uncertainty, raising the risk of refinancing, and a substantial debt maturity in the next 12-18 months," he said. Moodie, vice president and Senior Credit Officer of Chenyi Lu, said.

Moodie believes that the deferred interest payment shows the tightening of liquidity in Shandong. Shandong's willingness to repay debt is still high because the company needs to solve a large number of debt that will soon expire, including domestic bonds which will soon expire 4 billion 400 million yuan (which can be sold back in the second half of 2020). Although Shandong Ruyi repaid $345 million in bonds before its expiry in December 19, 2019, the risks still exist.

"The company is now operating normally, not without hematopoietic capacity. We will surely have a better development after this short period of difficulty. Shandong Ruyi people said.

In fact, before this Shandong's wish, the Shandong private enterprise, which was known as the "Chinese version LVMH", once had a magnificent view.

Statistics show that over the past ten years, Shandong has carried out a global merger of over 40 billion yuan, and the path of acquisition has reached its peak in the past four years. This is also the source of Shandong's "LVMH group".

With overseas acquisitions, Shandong Ruyi has held four listed companies worldwide, including A shares listed Ruyi group, Hong Kong stock listed Li Bang holdings and Japan Renown and French fashion group SMCP.

But now the problem is gradually showing.

According to reports, Japan's Renown has launched bankruptcy protection procedures on the 15 day of last month under the civil regeneration law. Due to the expansion of the new crown pneumonia and the reduction of people's activities, the sales of accessories in department stores declined sharply, and the 5 billion 300 million yen receivables that had not yet been recovered from the parent company's Shandong Ruyi subsidiary made Renown lose two consecutive fiscal years. It is the first time for Japanese listed companies to go bankrupt this year, the first time in 16 months.