Global Textile Network December 24th This is the latest example of a joke made by China's Fortune List. It is once again reluctantly confirmed that the Chinese company's "bubble" is huge. The example shows that these are on the table. For those companies that give ample impression of capital, some of them are illusory. For these companies, debt is the size of their achievements.
The financial distress of Zongheng Group, a textile leading enterprise in Shaoxing, Zhejiang, once again proves how unreliable it is to launch a wealth list in China.
Not long ago, it was listed as the 76th in the 2008 Hurun Report, and Yuan Boren, who has 7 billion yuan in wealth, finally failed to get rid of the financial crisis by the Zongheng Group, which has not been controlled by the 2008 China Enterprises Top 500 list. The intervention of the local government shows that the restructuring of the vertical and horizontal group has begun to ensure the “non-stop production†of the vertical and horizontal group.
This is the latest example of the jokes made by the China Fortune List. It is once again reluctantly confirmed that the “bubble†of Chinese companies is huge. The examples of vertical and horizontal indicate that these are on the table, and they are full of appearance and give people ample capital. For enterprises, some are illusory. For these companies, debt is the size of their achievements.
"The cash machine" failed. "Only when the tide recedes, we know who is naked." The outbreak of the global financial crisis has gradually squeezed out the bubbles in Chinese textile companies that are somewhat incomprehensible.
Like most textile and apparel companies that have been in crisis during this time, the crisis of the vertical and horizontal group is also the first to fail in the "cash machine". As the “cash machine†for the diversified expansion of the group, the textile industry of the vertical and horizontal group under the direct impact of the global financial crisis can no longer provide sufficient liquidity for the group as in the past. What is worse is that the main business is trapped. The business data of Zongheng Group has plummeted, and its chances of obtaining more bank loans have also decreased. In the end, in the case that other high-risk investment fields cannot obtain sufficient returns, Zongheng Group is caught in a capital chain break.
Since 2008, due to the impact of the global financial crisis and the global economic downturn, the demand for chemical fiber products that the vertical and horizontal group started from has fallen sharply. The price of chemical fiber products has also dropped from 13,000 yuan/ton to 7,000 yuan/ton. In addition, the raw materials purchased by Zongheng Group at a high price have been greatly reduced in value due to the collapse of international crude oil prices.
As a result, the sales of Zongheng Group have fallen sharply. Since August this year, the sales revenue of Zongheng Group's products has dropped by half from the normal situation of 500 million yuan per month, to 250 million yuan per month.
This directly led to a sharp decrease in the working capital available to the vertical and horizontal group. In addition, the resulting financing channels were not smooth, which eventually formed a deep blow to the vertical and horizontal group, cutting off the lifeline of the survival and development of the past, namely, the good main business. The performance supports the high-risk diversified investment of the vertical and horizontal group.
The “failure†of the diversified dilemma is only part of the corporate crisis, and it is the ambitious, realistic but unsuccessful multi-expansion plan that allows the vertical and horizontal to fall into reorganization.
According to a person close to Yuan Bairen, Yuan Boren’s corporate development ideal is to become a large-scale group enterprise across multiple industries. With the help of this ideal, some diversified investment plans with huge risks, quick success and quick progress have been launched quickly. From chemical fiber industry to financial equity investment, to real estate, and even to the huge capital, water, electricity, steel and other industries, the vertical and horizontal groups have no hesitation to step into.
In 2003, Zongheng Group made a large-scale investment in five major projects. At that time, some people were worried about this kind of gambling investment beyond the scope of their own capabilities. However, the vertical and horizontal investment did not stop. In the same year, it put into production of 400,000 tons of polyester chemical fiber production project; quickly launched a 600,000 tons of PTA production line; inexplicably spent a lot of money into a new field - Haoheng Heng Steel Co., Ltd.; and involved in the real estate industry, has Own "Fortune Center"; combined with Hubei Badong Power Investment to invest 1.1 billion yuan to develop the Yandu River cascade power station.
In the end, these projects did not bring the ideal return to the vertical and horizontal group, most of which have become the “burden†of the capital chain turnover of the vertical and horizontal group, such as the investment in steel business, although the vertical and horizontal group claimed 500 million benefits in the year. Yuan, however, the news from the market pointed out that the income of 500 million yuan it received was not enough to pay off the bank's loan.
In the absence of significant returns in these investments, and the situation of the capital chain of enterprises has not fundamentally improved, in 2006 and 2007, the vertical and horizontal groups could not stand the temptation of the hot spot at that time, and the vertical and horizontal began to concentrate resources and gradually shrink the main business - chemical fiber The layout of the industry will focus on the equity investment field.
It is said that at the time, the vertical and horizontal group had at least participated in the equity of up to five city commercial banks. The total use of funds reached more than 800 million yuan.
Although there is no definitive data showing the profit or loss of Zongheng Group's equity investment, but in 2007 the country gradually shrank monetary policy, and the global financial crisis, the financial chain dilemma of the vertical and horizontal group was finally exposed, and fell into an irreparable situation.
Difficult restructuring At present, the Zongheng Group, which was founded in 1995, has been unable to face the reality of debt at present, and the assets of the Shaoxing Municipal Government are being inspected. The emergency guarantee institution funded by the local government has been established, and is actively carrying out the work of corporate guarantee chain disposal, clearing of production and capital, and registration of creditor's rights and debts. It is understood that the Shaoxing Municipal Government has also set up a leading group for the relief and reorganization of the vertical and horizontal group. It has five special working groups for production security, creditor's rights and debts verification, letters and visits stability, creditor's rights and debts, and restructuring negotiations, to speed up the verification of corporate debts and enterprises. Reorganization negotiations.
However, some people familiar with the matter said that the hole left by the local government is not easily filled by the local government in a short period of time. "The vertical and horizontal group only has a bank debt of 4 billion yuan." According to local media reports, in addition to the bank's debt, the vertical and horizontal also owed more than 230 suppliers of goods, the total amount of 490 million yuan. Coupled with the high-interest loans raised by the private sector and the internal employee loans, the current situation is that the assets are insolvent.
To make matters worse, the troubles of the vertical and horizontal group also have a huge annual loss.
According to preliminary statistics, the total loss of the vertical and horizontal group is about 3 billion yuan. It is reported that in the loss of 3 billion yuan, the accumulated operating losses of the vertical and horizontal group accounted for about 2/3 of the annual loss, while the asset shrinkage accounted for another 1/3.
As of the date of the press release, the liquidation and resolving of the assets of the Zongheng Group is still in progress. The local government said that it will promptly study and determine relevant plans on the basis of asset clearing and debt and debt investigation, and strive to make the enterprise get out of the premise as soon as possible. The daily production work of the vertical and horizontal group was also carried out due to the “help†of the local government, and there was no “discontinuation†situation. The local government's “help†policy has implemented the compensation policy for the demolition of some of the company's land in advance, helping it to sign a processing agreement with another chemical fiber company to ensure that the production of the enterprise is non-stop and the workforce is stable.
At the same time as the "help" to the enterprise, it is said that the Shaoxing Municipal Government has carried out surveillance and residence in order to prevent Yuan Bairen from fleeing.
It is said that while the Zongheng Group has diversified its investment, its chemical fiber factory has been in the production phase for a long time.
Scuba fabric is a basic knit fabric in the market. It can do all kinds of garments like sports, yoga, and so on. Usually, it is polyester and spandex. We develop a modal and polyester with spandex scuba. It is a soft hand feeling and has a drape effect. It is very nice for garments. We have lots of orders for this item. The normal polyester scuba is very popular in the U.S market. We do lots of solid and printed on this item. And there are scuba crepe, scuba suede and so on. The hand feeling and effect are different on the face side, the back side is scuba.
Scuba
Shaoxing Concord Textile Co., Ltd. , https://www.ctknites.com