As a 100 billion real estate company, why can t Shimao Group have a debt of 1 billion US dollars?

Because the debt leverage of real estate companies themselves is relatively large, thoughShimao GroupThe market value has reached 100 billion yuan, but not all companies can get 1 billion yuanCash flow

This is a very real problem, for many real estate companies, in the process of real estate companies to acquire land and build real estate, because real estate companies themselves do not have so much funds, so almost all real estate companies will take the initiative to increase capital leverage. In this case, once there is a problem in the sales of these real estate companies, many real estate companies will indeed have the risk of defaulting on their debts, and some real estate companies have even defaulted on their debts. <>

Shimao Group did not repay the $1 billion bond as normal.

This is news about Shimao Group, when a $1 billion bond of Shimao Group matures, because Shimao Group itself has certain financial problems, so there is no way to repay it normally. After that, Shimao Group was in the bond market.

has been downgraded to the lowest, which means that Shimao Group has basically no way to raise money. Although Shimao Group is also actively selling its own assets, it is clear that the speed at which Shimao Group sells assets cannot keep up with the pace of debt repayment. <>

This problem is the current situation of real estate enterprises.

The reason why a real estate company with a scale of 100 billion yuan cannot repay the bond of 1 billion US dollars is mainly because all real estate companies have corresponding debt leverage. If there is no problem with real estate, these real estate companies can indeed snowball in this way.

role. However, when the real estate is not good, the real estate enterprise will default on its debts, and the debt default will in turn further lead to problems in the operation of the real estate enterprises. <>

Overall, Shimao Group's debt default is not oneCasesMany small and medium-sized real estate companies have actually defaulted on their debts, which is one of the reasons why we want to actively encourage various places to encourage the sale of houses.

As a 100 billion real estate enterprise, the World Trade Group's funds are very abundant, and the reason why this enterprise does not have a debt of 1 billion US dollars is that this company has many real estate development projects, so the funds are scattered on various projects, and naturally it cannot repay this huge debt; Another reason is that at the moment of the epidemic, the real estate industry is not very prosperous, and if there are fewer consumers who buy houses, the capital chain of the World Trade Group will have a certain dilemma, and naturally it will not be able to repay the debt of $1 billion.

First, because Shimao Group has a lot of real estate development projects.

For a real estate development group, the capital chain is the most important, and Shimao Group, as a 100 billion real estate enterprise, is not less than 1 billion US dollars of debt because Shimao Group has many developer projects, and a developer project will use a lot of funds, naturally these projects consume all the funds of the World Trade Group, and in this case, of course, this group company is not 1 billion US dollars of debt, after all, no matter how big an enterprise is, If the funds are dispersed, there will be a shortage of funds within the group. <>

Second, the impact of the epidemic has caused the WTO to be less than 1 billion US dollars.

You must know that the domestic epidemic situation is very severe, although the epidemic has been well controlled, but people's lives have also been affected, and for the prevention of this rigid demand product, because many people do not have enough economic strength to buy a house, which also leads to a relative recession in the real estate industry, and Shimao Group, as a real estate developer, because of the recession of real estate, resulting in many houses unsalable, which also leads to the group's funds are not timely. So naturally, this real estate developer can't afford to pay off $1 billion in debt. <>

3. Summary. In general, the World Trade Group, as a 100 billion real estate enterprise, because the company's foundation is relatively good, has not affected the company's foundation, and the company can't afford to pay off the debt of 1 billion US dollars is because the company has sprinkled a lot of funds on various projects, and at the same time, coupled with the impact of the epidemic, the real estate industry is sluggish, and there are fewer people who buy houses, so there are fewer funds, and naturally the company's funds are very short. <>

Because most of Shimao Group's funds are fixed assets and its liquidity is limited, it is less than $1 billion in debt.

In fact, such a situation is not what Shimao Group is willing to see, and the explanation given is that under the influence of factors such as changes in the real estate industry environment, the group's contracted sales have declined significantly, with only 100 million yuan in the first five months of this year, a year-on-year decline of 72%, that is, a decrease of 87.6 billion yuan. Of course, Shimao Group has also been working hard to dispose of assets in an attempt to save itself.

The main reason is that 100 billion assets do not represent 100 billion liquidity, so it is possible to not pay back the money.

It is particularly difficult, and the road to self-help is long and difficult. Because the company was not only unable to repay its maturing debts in a short period of time, but also could not get a large amount of investment. More importantly, the company was unable to gain the trust of other investors and consumers, nor was it able to establish a more complete operation and management system.

This will greatly hinder their path to self-help.

The World Trade Group is indeed a relatively large real estate company, which was once very brilliant and was able to quickly occupy the real estate market. However, due to the influence of many factors, the company has a debt crisis and is facing development difficulties. A $1 billion debt default will not only affect its subsequent development, but also make it more difficult to save itself.

The company is at risk of breaking the capital chain and needs to bear huge financial pressure. I think this is because the company really can't solve the financial problem and can't take out bank loans.

and other ways to deal with the debt crisis. Under the dual pressure of internal and external, the company can no longer create brilliance, nor can it break through the existing development dilemma. <>

The company's competitiveness and influence are constantly being weakened, and the competitive advantage is becoming less and less. Although it used to have competitive advantages such as capital, talent, market and positive resources, this is not the case, and the company cannot increase its competitive advantage, so it cannot improve its competitiveness. At the same time, news of a debt default will further limit its reach and reduce its current impact.

If it wants to save itself, the company will have to pay a much greater price. <>

The company needs to spend a lot of human, material and financial resources to avoid internal turmoil and external crises. It is undeniable that for a real estate company, a debt default is extremely negative news. The news will cause panic among home buyers, as well as questions and anxiety among those within the company.

If the company is unable to come up with a proper treatment plan and reassure the people involved, it will fall into a depression. It is precisely because of this that the cost of self-rescue is extremely high.

It is understood that in terms of overseas debts, Shimao Group currently has 8 US dollar bonds, amounting to about US$5.7 billion, totaling about RMB 38 billion. From 2023 to 2027, Shimao Group will have bills due every year, and most of these US dollar bonds have fallen to the range of more than ten or twenty cents of US dollar face value. Moreover, Shimao had already defaulted on domestic debts before this, and in April, a private placement bond with a principal of 500 million yuan, "20 Shanghai Shimao PPN002", announced a one-year extension, or pretending to be paid in installments.

In May, a corporate bond with a principal of 100 million yuan "19 Shimao G3" defaulted and announced a one-year extension.

It will be difficult for the World Trade Group to find people willing to take over and borrow money, so the road to self-help will be very difficult.

It has begun to ** the property rights of projects in various places to save themselves.

Under the influence of the new crown epidemic, the global economic consumers are relatively depressed and have a strong psychology.

1. First of all, the main question, the WTO.

There is no bankruptcy, corporate bankruptcy is a big thing, the company will make an announcement, and the society will follow up and report, especially in the current environment of the real estate industry recession, this is hot news and will definitely be reported.

2. Difficulties are certain, and there are three red lines in the country.

Under the pressure, how radical the real estate industry is in the early stage, how difficult it is now, but now the circle is in accordance with the national policy, the state will support the bottom, the state for high-quality real estate projects, state-owned assets will take over, which will not affect the delivery of the building, affect the mood of the majority of owners, but also save the troubled enterprises;

3. The country's tightening capital side is now also loosening, and the real estate industry has been tight in funds before, and everyone has to break the situation, and now it is also issuing policies;

4. The city has introduced policies that are favorable to real estate, and it is better to lower the first home than to lose.

interest rate, for saving a second child.

Or how much subsidy will be given to a family with three children to buy a house, etc.

In fact, it is difficult to say this situation, because there are many real estate companies similar to Shimao Group, and many real estate companies themselves are also under great financial pressure.

After Shimao Group defaulted on its debts, many people began to focus on Shimao Group as a company. To some extent, Shimao Group itself is a large real estate company of 100 billion yuan, and it is hard to imagine that such a company would default on even 1 billion US dollars in debt. The founder of Shimao Group was once in the top 20 of Hurun's wealth list, and in just two years, the founder's worth has shrunk by more than 90%, and no one knows whether Shimao Group will be able to withstand such a crisis.

What's going on here?

This is news about Shimao Group, which has defaulted on a $1 billion debt. Although the creditors did not explicitly ask Shimao Group to accelerate repayment, for Shimao Group, Shimao Group's business volume has shrunk by about 80% last year, which also means that Shimao Group's cash flow is very tight, so Shimao Group's situation is indeed difficult. <>

No one knows if Shimao Group will survive the darkest hour.

The main reason for this is that the decline in Shimao Group's business volume is very obvious, and before that, Shimao Group's debt scale has reached 400 billion yuan, so there may be more and more debt defaults like this. Although Shimao Group has begun to actively save itself and sell off its various core assets, Shimao Group may continue to default on its debts because the sales of Shimao Group's real estate are not satisfactory. <>

Shimao Group needed to resolve the issue of property sales as soon as possible.

Because Shimao Group has a huge scale of debt leverage, if we can't solve the problem from the sales of real estate, many of Shimao Group's behaviors are actually tearing down the east wall to make up for the west wall, which also means that it is difficult for Shimao Group to really withstand the debt crisis, and the company's economic and business situation will also be seriously affected. <>

It will definitely be difficult for this company to come back to life, and this matter affects his customers, and the amount of money is too large, in fact, the assets of the mortgage are not enough.

I think so, because the emaciated camel is bigger than the horse, and there is a billion dollars in debt, but the project under it is still in operation, and there is a return of funds, which can always be reinvigorated.

When exactly will the house be handed over?

I think so, because as long as the 100 billion Shimao disposes of the assets, recoupes the funds, and repays the debts in installments, it may be able to survive.

In 2022, although the system has been loosened to a certain extent, the housing market is cold, and the repayment pressure of real estate companies is still very high. On the night of July 3, Shimao Group announced on the Hong Kong Stock Exchange that the company's US$1 billion public offering of ** bonds could not be repaid with interest. It is understood that the document expires on July 3, 2022, and the coupon rate, principal and accrued unpaid loan interest have accumulated 100 million US dollars.

In this regard, Shimao Group stated that the company is committed to proactively negotiating with the debtor again to find the best way to implement it, and then do its best to treat the debtor fairly and ensure the rights and interests of all stakeholders of the group company.

In addition, in January this year, Pengcheng downgraded Shimao Group's foreign investor default rating from BB to B-, the high-end unsecured rating and the high-end unsecured documents sold from BB to B-, and the utilization rating to RR4, all ratings were again under negative observation.

In February, Moody's downgraded Shimao Group's Corporate Family Rating (CFR) to "CAA1" from "B2", indicating that the company has already defaulted on its debts, which are likely to default in part or all of its debts, and changed its outlook for the future from being included in the watch list to negative. The downgrading of the rating is generally due to the low safety performance of the WTO in maintaining liquidity.

In fact, due to the great changes in the natural environment of China's real estate industry and the cumulative impact of the epidemic, real estate companies have all been affected without exception, and Shimao Group has also fallen into an economic crisis, and has not yet released its 2021 annual report.

The financial report shows that as of June 30, 2021, Shimao Group had total liabilities of RMB 100 million and interest-bearing liabilities of RMB 164.5 billion, but the cash and quasi-currency of the accounts were only RMB 100 million, which was far from covering the interest-bearing liabilities. In addition, the total open market operation liabilities of the WTO at maturity in 2022 are about 13 billion yuan and 2.5 billion US dollars.

To add fuel to the fire, in recent years, the market environment encountered by real estate companies has not improved overall. From January to May 2022, Shimao Group's total contracted sales amounted to approximately RMB100 million, a significant decrease of approximately 72% from RMB100 million in the same period in 2021. How to resolve the huge debt is undoubtedly the biggest challenge for Shimao Group at present.