Looking Back On The Bankruptcy Reorganization Of The 35Th Supervision: Can The Phoenix Nirvana Be Carried Out Lightly

From the perspective of previous schemes with good implementation effect, the key to the success of restructuring is to return to the source of reorganization and enable enterprises to comprehensively improve their own quality and sustainable operation ability through bankruptcy reorganization.

When a company in financial distress has a debt dispute crisis, the establishment of buffer space through bankruptcy reorganization to continue the value of the company's sustainable operation will help to recover the interests of enterprises, creditors and shareholders to the greatest extent. The recently issued "opinions of the State Council on further improving the quality of listed companies" clearly puts forward that diversified delisting channels such as bankruptcy reorganization should be unblocked, and listed companies should be supported to clear their risks through bankruptcy reorganization.

According to statistics, nearly 70 companies have been ruled by the court since the bankruptcy law was implemented. After the bankruptcy reorganization, the debt risk has been cleared, the shareholder structure has been optimized, and the main business has been "reborn". The company is in a desperate situation. It is a win-win situation for creditors, shareholders, listed companies and other parties. This is also an important reason why companies involved in bankruptcy reorganization have been sought after by the market in recent years. For example, due to the depression of the shipbuilding industry and the mistakes of business policies, Shuntian ship, a major loss maker, lost 5.434 billion yuan in 2015, with an asset liability ratio of 268.09%. Due to insolvency, the company finally went into bankruptcy reorganization procedure. Through bankruptcy reorganization, the company reduced debt by more than 8 billion yuan, cleared up the loss assets and injected new business. The net profit of the year reached 2.280 billion yuan after bankruptcy reorganization.

However, there are also some companies that have "recovered" for a short time after the implementation of bankruptcy reorganization, and then fell into the plight of high debt, weak main business and continuous losses in a few years. For example, a certain agricultural company in Shenzhen stock market implemented bankruptcy reorganization in 2015, but the good times were not long, and there were large losses in the next year, the follow-up main business continued to decline, and the cash flow of operating activities could not even cover the company's debt interest.

In this way, it is only the first step in the long march to realize the goal of going to battle with light equipment through bankruptcy reorganization. Whether the company can really "Phoenix Nirvana" after going to battle with light equipment is still a big knowledge.

In the process of bringing restructuring back to the source of "rescue", we should promote the balance between long-term and short-term demands of all parties. Picture vision China

Rethinking the reorganization plan: the balance between short-term solution and long-term development

Due to the good liquidity and transparent price of listed companies, creditors and restructuring investors tend to accept the shares of listed companies compared with ordinary enterprises. Therefore, the bankruptcy reorganization of listed companies often involves the equity adjustment arrangement of investors (shareholders). At the same time, bankruptcy reorganization is usually a package plan, which is often associated with the change of actual controller, divestiture of loss assets and injection of high-quality assets. Therefore, the bankruptcy reorganization of listed companies involves a longer chain and requires more balanced wisdom.

From the perspective of introducing restructuring investors, in the bankruptcy and reorganization of listed companies, some shares of the company are usually taken out to recruit investors for restructuring. The source of shares is the transfer of existing shareholders or the conversion of capital reserve into shares, and the price is often at a discount to the market price. On the one hand, the purpose of introducing restructuring investors is to raise the funds needed to repay the creditor's rights, on the other hand, it is also to attract powerful investors to support the company's subsequent development. It can be seen that the recruitment of restructuring investors is different from the general introduction of financial investors. Restructuring investors bear the expectations of all parties and need to invest resources and time to support the company's follow-up development, rather than just get financial returns and go out in a short period of time.

Recently, the plan of introducing restructuring investors into a gem company which has been going bankrupt and reorganized has attracted much attention from the market. The restructuring investors intend to transfer the shares of the listed company converted from capital accumulation fund. The overall consideration is 1.218 billion yuan, and the average price is about 1.59 yuan / share. At that time, the market price of the company's stock was about 4.2 yuan / share. The restructuring investors were mainly investment institutions with no industrial background The accumulated net profit of Nuo in the next three years will not be less than RMB 600 million. The recruitment conditions, determination process and basis, and whether the performance commitment is realizable have aroused market attention. The exchange has also sent letters to inquire continuously. However, the consortium of restructuring investors introduced by another Shenzhen Stock Exchange main board company which implemented restructuring in 2019 are mostly natural persons or private equity investment institutions. According to the company's 2020 semi annual report, some restructuring investors have left the market quickly.

The other is the property price change scheme, the core of which is the disposal arrangement of the company's property. It is simple and convenient to sell all the assets at one go, and the risks are cleared at one time. However, if the company does not inject high-quality assets in the future, the company will become "empty shell" after the reorganization; some assets will be retained and the funds raised will be reduced, which may cause doubts that will damage the interests of creditors. Therefore, it is necessary to make prudent arrangements in combination with the company's short-term creditor's rights and debts, main business and existing risks, as well as long-term development direction and business plan, and inform all parties through full information disclosure.

In last year's bankruptcy, the company only held a large-scale reorganization of its assets, and the scope of its assets was determined in the reorganization of the company's assets The impact of continued profitability is not known. At the same time, the focus is still on the medium and long-term business plan. Only two months after the reorganization plan was ruled by the court, the company announced that it would carry out securities investment and set up a limited partnership. The exchange issued a letter of concern to the company for inquiry, and the company took the initiative to terminate the above-mentioned investment matters. Up to now, the company's cashmere business has not been further invested, and no new high-quality assets have been injected. In the first half of 2020, the operating income is only 40 million yuan.

What's more, whether the agreed asset injection is feasible and can be implemented. As mentioned above, according to the reorganization plan, the company simultaneously implemented "judicial reorganization + major assets reorganization" in bankruptcy reorganization. While stripping the original loss making ship manufacturing business, the company implemented asset injection of trust and power generation business, so as to improve the company's sustainable operation ability from the source. However, some asset injection plans remain in the stage of "just talking but not practicing". A company on the main board of Shenzhen stock market implemented bankruptcy reorganization in 2013, which solved the historical burden. At the same time, the reorganization plan also agreed to introduce restructuring parties and inject high-quality assets on the basis of debt restructuring. However, seven years later, the joint venture re organization parties still have no news. At present, the company only relies on a small number of bicycles In the 2019 audit report, the annual audit accountant highlighted the significant uncertainty of the company's going concern.

Return to the origin of "salvation": let bankruptcy reorganization "have both God and form"

Since 2019, with the change of macro environment at home and abroad and the deepening of supply side structural reform, some listed companies' debt risks and operational risks have broken out, and bankruptcy reorganization cases of listed companies have increased significantly. The special meeting of the financial committee of the State Council held on October 31 once again proposed the establishment of a normalized delisting mechanism. It can be predicted that bankruptcy reorganization, as an important part of delisting mechanism, will play a more active role in accelerating risk clearing, promoting the survival of the fittest, and playing the role of market resource allocation.

Although bankruptcy reorganization has many benefits, it is not a free lunch. Behind it, there are very complex long-term and long-term interest demands and multi-party games. If we only balance the interests of all parties involved in the reorganization, we may be able to return to the origin of reorganization, so that enterprises can comprehensively improve their own quality through bankruptcy reorganization Improving the ability of going concern may be the key to the success of restructuring.

In the process of bringing restructuring back to the source of "rescue", appropriate mechanism arrangement is still needed, so as to promote the balance between long-term and short-term demands of all parties, and finally achieve the purpose of "saving enterprises in distress".

The first thing to bear the brunt is the transparency of information disclosure, which is the basis for decision-making and game playing of bankruptcy reorganization related parties. In the new securities law implemented on March 1, 2020, Article 80 clearly stipulates that "the decision to apply for bankruptcy" and "entering the bankruptcy procedure according to law" are major events of listed companies, and the company shall perform the obligation of disclosure of interim reports. The stock listing rules of the exchange also make corresponding information disclosure requirements for important nodes in the whole process of bankruptcy reorganization. However, after the reform of suspension and resumption system in 2018, listed companies can no longer suspend trading for a long time after bankruptcy reorganization. In the case of continuous transactions, the demand for information of all parties involved in the reorganization has been improved, and the information disclosure rules of bankruptcy matters need to be further refined and improved.

In addition, some necessary restraint mechanisms can also be considered for short-term arbitrage. In the practice of restructuring, there is no clear legal and regulatory basis for how to set the lock-in period for the shares acquired by the restructuring investors. For example, if the restructuring investors transfer their shares within a short time after the implementation of the reorganization, it is not conducive to the company's equity structure and long-term operation stability. In addition, the short lock-in period and large price difference facilitate the subsequent arbitrage reduction in a short period of time, which may deviate from the original intention of all parties to introduce restructuring investors, and does not provide substantial help to the subsequent improvement of quality and efficiency of the company.

Finally, the focus should be on how to continuously improve the core operation ability of the company. Return to the source of "rescue", give consideration to the short-term solution and long-term development, make the reorganization plan, especially the business plan, property price change and asset injection scheme, be more based on improving the sustainable operation ability of listed companies and improving the company's fundamentals, and consider to make these arrangements effectively implemented through certain mechanisms (such as the "continuous supervision" mechanism in IPO) Only when the listed companies can realize "Phoenix Nirvana" through bankruptcy reorganization, can bankruptcy reorganization play its due role in promoting the high-quality development of listed companies, realizing risk clearing and strengthening the survival of the fittest.