Ten years in Hedong and ten years in Hexi, but it took only five years for R&F to go from a buyer who could lower the price to a seller who had to sell at a loss.
On the evening of September 5, R&F Properties announced that it sold the Beijing R&F Wanda Realm Hotel at a loss of more than 6.5 million yuan, and the net proceeds were used to repay the group’s debt. The hotel was taken over from Wanda by R&F five years ago.
Previously, R&F Properties has also repaid debts by selling assets many times, which is basically an active or passive discount. Although the sale of assets and successful extension have gained a certain amount of room for maneuvering, it is different from the hundreds of dollars that need to be repaid in the next 12 months. The debt ratio of 100 million is still a drop in the bucket.
What makes the creditors even more critical is that R&F, after falling into the debt crisis, was not decisive and timely in its disposal of assets, resulting in more and more passiveness. When the market continues to decline and stampede occurs, how long can R&F survive?
still not lying down
According to the transaction announcement disclosed by R&F Real Estate on the evening of September 5, Guangzhou Zhaoxi Investment Co., Ltd., Beijing Yingxie Real Estate Investment Co., Ltd., the indirect wholly-owned subsidiary of R&F Real Estate, as well as Beijing Wanda Realm Hotel Management Co., Ltd. and Guangzhou Fujing Hotel Management Co., Ltd. (Target Group) entered into an agreement whereby R&F Properties agreed to sell 100% equity interest in Guangzhou Fujing Hotel Management Co., Ltd. to Beijing Yingxie Property Investment Co., Ltd. at a consideration of RMB550 million.
For this transaction, R&F Properties stated in the transaction announcement that it is expected to record a loss of approximately RMB 6.537 million from the sale, and the net proceeds from the sale will be used to repay the company's debt.
In the opinion of Xiao Yunxiang, a senior analyst at Tongce Research Institute, the 550 million yuan from selling the hotel at a loss can be said to be a drop in the bucket for its huge debt balance, but even with a loss, R&F did not give up the choice to lie down. Still worth affirming.
After the 550 million yuan sale of hotel assets, will R&F Properties have plans to sell more projects in the future?
A reporter from Beijing Business Daily got in touch with R&F Properties, and the other party responded that "the specific information is subject to the announcement and disclosure on the group's official website."
High-quality assets at constant discounts
In addition to this 550 million yuan sale of hotels, R&F has sold Guangzhou International Airport R&F Integrated Logistics Park to Blackstone Group twice, totaling 8.263 billion yuan; 10 billion yuan sold R&F properties to Country Garden; 2.66 billion Hong Kong dollars will Thames The 50% stake in Instant Glory International Limited, the City project company, and all the interests and interests of the sales loan were sold to Zhang Songqiao, the founder of CC Land. These transactions are basically discounted sales.
Taking the Thames City project company sold by R&F Properties in April as an example, according to the R&F transaction announcement, the unaudited management accounts of Instant Glory International Limited as of March 31, 2022 had an unaudited consolidated net asset value of approximately HK$5.69 billion , the value of the 50% stake is also 2.845 billion Hong Kong dollars. Among the 2.66 billion Hong Kong dollars obtained from the sale to Zhongyu Land, the target company also owes about 1.65 billion Hong Kong dollars in sales loans to R&F.
Therefore, the equity price of the target company in this transaction is only HK$1.01 billion, which is equivalent to a 355% discount.
According to incomplete statistics from a reporter from Beijing Business Daily, in 2021, R&F will withdraw more than 21.8 billion yuan of funds through the transfer of equity, the sale of assets, and capital injection by major shareholders.
However, compared with the huge debt of R&F, the capital of more than 20 billion is still a drop in the bucket.
According to the 2022 Interim Report of R&F Properties, as of June 30, 2022, R&F Properties recorded a loss of 6.92 billion yuan attributable to company owners, short-term borrowings of 4.52 billion yuan, bank loans, domestic bonds, senior notes and other loans totaling RMB 134.507 billion yuan, of which 82.661 billion yuan will be repaid within the next 12 months.
On the other hand, in terms of cash, the total cash of R&F Properties during the same period was RMB 15.32 billion, including restricted cash of RMB 13.296 billion. The cash and cash equivalents that can be used in a timely manner were only RMB 2.024 billion. R&F still has a long way to go. to go.
Due to cash flow pressure, R&F extended the maturity dates of 1.95 billion yuan and 1.4 billion yuan of corporate bonds due in April and May respectively by one year, and extended the overall maturity of 10 overseas US dollar bonds for a period of about 3- 4 years, got a chance to "respite".
In response to such a situation, in addition to selling assets, R&F Properties is also trying to overcome the liquidity crisis through other measures.
On August 31, R&F Real Estate announced that it has entered into a strategic cooperation framework agreement with Guangzhou China Merchants Real Estate Co., Ltd., a subsidiary of China Merchants Shekou, and will establish a cooperative relationship in the field of urban renewal in southern China.
This also allows R&F, which has many old renovation projects in southern China, especially Guangzhou, to receive the cooperation and assistance of central enterprises, release the value of urban renewal projects, and ease the pressure on working capital.
According to the 2021 annual report of R&F Properties, as of the end of 2021, R&F has signed more than 64 urban renewal cooperation projects across the country, with a planned total construction area of more than 72 million square meters and a saleable area for future development of more than 35 million square meters. The value of goods exceeds 1 trillion yuan.
Based on the saleable area available for future development, first- and second-tier cities accounted for 93%, and the Greater Bay Area accounted for 76%.
The best time to save yourself missed
"R&F missed at least two rounds of self-rescue opportunities after the thunderstorm, one in 2019 and one in 2020." An analyst familiar with R&F told the Beijing Business Daily reporter that R&F bought the Wanda Hotel in 2018 and 2019. Adjustments should be made in a timely manner after consecutive losses.
"Compared with some of the explosive real estate companies in the later stage, R&F has an early fortune and relatively high-quality assets. If it can replicate Wanda's approach in the first place, it will be a step ahead." However, out of nostalgia for high-quality assets, R&F will not wait until the property market in 2021. After the companies that were in difficulty became more and more crowded together, they were slow to realize and repay their debts, and they seemed hesitant.
Taking a sale in March this year as an example, R&F Real Estate sold the Vauxhall Square project in London, England to Far East Development for £95.7026 million.
However, there is also a repurchase authority clause in the sale, that is, the seller will have the right to choose to repurchase the entire issued share capital and inter-company loans of the target company from the buyer after completion, with a term of 6 months and an option consideration of 107 million GBP.
Judging from the loss of 68.845 million pounds, this sale cannot be regarded as a good deal, but R&F said that the sale will allow the group to offset its liabilities due in 2022.
On the evening of September 2, when the repurchase period was approaching, R&F Properties announced that it would exercise the option and repurchase all the issued share capital and loans of the target company for 107 million pounds.
The sale obtained funds to repay the debt, and the redemption expired after 6 months. It can be said that R&F pawned the Vauxhall Square project to Far East Development. After the expiry, according to the content of the announcement, it provided funds for the option consideration through external financing and redeemed the project. .
In this regard, R&F explained that Vauxhall Square, the project held by R&F, is a landmark project in the UK. The repurchase of R&F can maintain its rights and interests in the development project, which can demonstrate the group's commitment to growth and overseas development, and bring benefits to the group. for long-term benefits.
But now for R&F, which has already exploded, the long-term interests do not seem to be the most important thing.
As real estate analyst Yan Yuejin said, when the stampede has appeared, all kinds of assets lack the bargaining power, and no matter how high-quality projects are, there will be no advantage.
Beijing Business Daily reporter Wang Yinhao Sun Yongzhi