Tickets for the first M&A were spent on attracting investment from Shekou. Why is it controversial after "breaking the ice"?

In recent years, the successful registration of the first M&A bill in the real estate industry not only sent a signal to the market that M&A financing broke the ice, but also caused some controversy.

65438+1October 12, China Merchants Shekou (00 1979) announced that the company had completed the registration of the first phase of 3 billion yuan medium-term notes (M&A) in 2022. However, half of the funds will be used to repay the company's bank loans. Judging from the target of M&A, the first phase of 654.38+0.29 billion yuan will be used for the acquisition of an old reform project last year.

Since 2002112, the regulator has repeatedly voiced support for mergers and acquisitions of large-scale high-quality real estate enterprises and encouraged financial institutions to provide related services. As the first real estate enterprise to complete the registration of M&A bills, China Merchants Shekou has attracted much attention. However, analysts believe that although the current market has high expectations for M&A financing of housing enterprises, it still faces many difficulties in implementation. The premise of M&A market recovery is still the recovery of sales and land market, and several special types of M&A may take the lead in recovery.

The lottery of 3 billion yuan was used for mergers and acquisitions and debt repayment.

According to the M&A Bill Prospectus issued by China Merchants Shekou, of the 3 billion yuan medium-term notes, 65.438+0.5 billion yuan is intended to support enterprises with strong synergy in the industry to alleviate liquidity pressure, including but not limited to the replacement of initial investment and subsequent asset investment acquisition. At present, it has been made clear that 654.38+0.29 billion yuan will be used for M&A, and the remaining 265.438+0 million yuan will be used for future projects that meet M&A requirements; 65.438+05 billion yuan was used to repay the company's bank loans. The 2.58 billion yuan medium-term notes issued in the first phase include three-year notes and five-year notes, both of which are 654.38+0.29 billion yuan.

China Merchants Shekou did not point out the target of the merger, but it must be an "urban renewal project": the project of Company A is an urban renewal project focusing on housing, and Company B, the shareholder of Company A, sold 80% of the equity and creditor's rights of Company A on August 9, 2002/KLOC-0, and was finally won by the issuer's subsidiary. At this point, China Merchants Shekou, Company C and Company B finally hold 40.8%, 39.2% and 20% of the shares of Company A respectively, and the issuer is the largest shareholder after this merger. It is reported that the consideration for the acquisition of China Merchants Shekou is about 26,543.8+0.54 billion yuan, and the amount raised for M&A in this bond issue does not exceed 60% of the total M&A price, mainly by replacing the previous investment and subsequent asset investment.

The First Financial Reporter noted that China Merchants Shekou mentioned in the land purchase statement in August last year that about one month after the July sales and land purchase statement was disclosed, the company added six new projects in Foshan, Guangzhou, Nantong, Kunshan and Shanghai, among which the total transaction price of the new and old renovation project in Hongkou District of Shanghai was 42180,000 yuan, and the company owned the project.

According to public information, Shanghai Hongkou Urban Renewal and Construction Development Co., Ltd. (hereinafter referred to as "Hongkou Urban Construction") is responsible for this project, which was jointly funded by Shanghai Renewal and Development Company and Shanghai Hongfang (Group) Co., Ltd. (hereinafter referred to as "Hongfang Group") in March 2065438+2009. According to the government of Hongkou District, official website, this project is the first old renovation project in the city to start residents' signing contracts. It is "urban cooperation, government-enterprise cooperation and district-oriented" and the largest single plot in Hongkou District in recent years.

However, after that, the project equity continued to be transferred. In September 2020, Red Group transferred 20% equity of Hongkou Urban Construction to Shanghai North Bund (Group) Co., Ltd. (hereinafter referred to as "North Bund Group"); In August, 20021year, Hongkou Urban Construction listed and transferred 80% equity of Shanghai Li Hongan Enterprise Development Co., Ltd. (hereinafter referred to as "Li Hongan") and the creditor's rights of 406. 1 billion yuan. China Merchants Shekou and Suzhou Zhao Kai Real Estate Co., Ltd., a joint venture company of Greenland Group, won the bid and took this opportunity to participate in the project. According to the transaction announcement of Shanghai United Assets and Equity Exchange, the reserve price of this transaction was 4.2/kloc-0.70 billion yuan, and the transaction price was 4.223 billion yuan.

As for the M&A reason of Company A's project, China Merchants Shekou also mentioned in this M&A bill prospectus that due to the huge volume of the residential project, it is necessary to introduce developers with strong capital and operational capabilities to ensure the smooth progress of the project and avoid the project being stranded halfway. This also means that China Merchants Shekou did not invest in several insurance companies concerned by the market, but invested in real estate enterprises positioned as state-owned enterprises with government functions to transfuse blood for large old enterprises.

It is difficult for real estate enterprises to acquire.

In June 5438+February last year, the central bank and the China Banking Regulatory Commission jointly issued the Notice on Doing a Good Job in Financial Services for Risk Disposal Projects of Key Real Estate Enterprises. Since then, Zou Lan, director of the Financial Markets Department of the Central Bank, said that project mergers and acquisitions among real estate enterprises are the most effective market-oriented means for the real estate industry to resolve risks and realize liquidation. Prior to this, the Central Bank, the China Banking Regulatory Commission and the State-owned Assets Supervision and Administration Commission have convened some private and state-owned housing enterprises and major banks to hold a forum to encourage high-quality enterprises to intensify the merger and acquisition of real estate projects in accordance with the principle of marketization, and encourage financial institutions to provide financial services for mergers and acquisitions, help resolve risks and promote the clearing of the industry. The symposium on housing enterprises organized by the Dealers Association also made it clear that priority will be given to supporting mergers and acquisitions and project construction to register and issue bonds.

After becoming the first real estate enterprise to successfully register M&A bills, according to the data of the third quarterly report last year, after the completion of this bond issuance and the implementation of the above-mentioned fund-raising plan, the asset-liability ratio of the consolidated financial statements of China Merchants Shekou will increase by 0.05%, and the current ratio and quick ratio will remain unchanged. China Merchants Shekou suggested that the company's short-term debt repayment pressure is risky. By the end of 2020, the total interest-bearing debt of China Merchants Shekou was 65.438+060.444 billion yuan, of which 60.048 billion yuan was due within one year, accounting for 37.43%.

Some people in the real estate industry told reporters that the financing cost of M&A bills in the inter-bank market is relatively low, which requires higher qualifications for issuers. If the funds are not used for insurance enterprise projects, part of them will be used for debt repayment, which will inevitably cause controversy. However, he also stressed: "No matter what kind of mergers and acquisitions, the high probability is led by state-owned enterprises, because it is indeed more reliable in terms of qualifications. As for the target of M&A, I still expect the insurance company's project to officially' break the ice'. "

Previously, Huatai Securities (60 1688) research report pointed out that the implementation of the policy is expected to moderately "loosen" the debt side of high-quality central enterprises and ease the liquidity risk of insurance companies. However, the implementation requires the bank to have a quota, and the real estate enterprises have the will and supervision support. At present, there are four main difficulties: first, there are insufficient high-quality M&A projects; Second, it is difficult for insurance companies to do their best, and state-owned enterprises need to take into account both income and social responsibility. How to reach an agreement on the consideration is the key; Third, the scale of information disclosure is difficult to grasp; Fourth, supporting policies should be kept up.

The Chen Cong team of CITIC Securities also said that although the low-credit housing enterprises are pinning their hopes on the "living water" of the M&A market, considering the actual situation, large-scale M&A projects will only happen after the housing sales market and the land market pick up. Chen Cong believes that both the potential acquirer and the acquired party are unwilling under the circumstance that the stock project is complicated and the industry expectation has not been completely improved. At present, the main body that may initiate mergers and acquisitions is mainly state-owned enterprises. Considering the principle of maintaining and increasing the value of state-owned assets, it is estimated that the M&A market of real estate projects will recover in the second half of the year after the end of March 2022 with the gradual recovery of sales.

Chen Cong's team also pointed out that in reality, several special types of mergers and acquisitions may be initiated first: first, high-credit companies have more incentive to acquire the equity of joint ventures with low-credit companies first; Second, banks and financial institutions facing the risk of bad debts may look for the sponsors of mergers and acquisitions for some projects that are easy to sell and have good asset quality but the developers are in trouble, and directly provide financial support to the acquirer; Third, the merger and acquisition of light asset property management and commercial management platforms.