Recently, the reporter learned from the Shenzhen Intermediate People's Court that Huahan Technology Co., Ltd. (hereinafter referred to as "Huahan Technology"), a former leading enterprise in the pipeline industry, was approved by the Shenzhen Intermediate People's Court for reorganization, and on July 20, 2020, the reorganization funds of 2.98 billion yuan were all in place. Since filing for bankruptcy in 2018, the company has had the opportunity to be reborn.
Screenshot of 2.9 billion reorganization funds entered into the account.
Former leaders entered the restructuring and emerged from debt
Huahan Technology was established in 2000 with a registered capital of 111.38 million yuan, and its main business is the research and development, production and sales of underground intelligent pipe network. The company has two industrial bases in Nanshan and Pingshan, Shenzhen, with more than 900 employees. The company is the editor-in-chief of two national industry standards and the editor-in-chief of the Ministry of Housing and Urban-Rural Development, with 186 patents and 58 software copyrights, and is a leading enterprise in the national pipe network industry. In recent years, due to the impact of its own excessive expansion and other factors, the amount of liabilities of Huahan Company has reached more than 5 billion yuan, and it is difficult to maintain production and operation, technology research and development, etc., and operating profits have been continuously eroded, and finally fell into operational difficulties. In August 2018, upon the application of creditors, the Intermediate People's Court of Shenzhen Municipality, Guangdong Province, ruled that Huahan Technology entered bankruptcy liquidation procedures.
In the course of the trial, it was found that although Huahan Company was in operational difficulties, as a former leading enterprise in the pipeline industry, it still retained a relatively stable and complete R&D team and good production conditions, with certain development prospects, restructuring value and reorganization feasibility. On May 7, 2019, the People's Court ruled to transfer the case to the reorganization procedure based on Huahan Technology's application, and approved Huahan Company to manage its own property and business affairs. On December 25, 2019, Huahan Company passed the draft reorganization plan by a large vote at the second creditors' meeting. On December 27, 2019, the People's Court ruled to approve Huahan Technology's reorganization plan. On July 13, 2020, the original investor assisted the reorganization investor in registering the change of equity transfer. On July 20, 2020, the reorganization funds of 2.98 billion yuan were all in place.
The second creditors' meeting of Warham was held to vote on the draft reorganization plan.
Central enterprises led the strategic investment, and high-tech enterprises resumed work and production
Huahan Technology has retained good product advantages, technical advantages, scientific research advantages and market advantages. If its assets are sold in liquidation, these advantages will be lost. Through judicial reorganization, we will actively introduce strategic investment led by central enterprises, and give strong support in corporate governance, industrial integration, brand effect, upstream and downstream supply chains, etc., so as to drive private high-tech enterprises to tide over difficulties. Huahan Technology was able to continue to operate and steadily enter the stage of resuming production. Under the background of the new crown pneumonia epidemic, the number of orders of Huahan Technology has still rebounded significantly, the main business has been transformed and upgraded in an orderly manner, the research and development team has gradually increased, and it has now undertaken a number of large-scale projects, involving an amount of more than 30 million yuan.
Enterprises resume work and production at the scene.
Stimulate the vitality of market players and ensure entrepreneurial innovation
For entrepreneurs, judicial restructuring not only retains their long-term efforts and painstaking efforts, but also reduces the burden of debt guarantees and other debt guarantees borne by enterprises, and promotes their economic rebirth. Zheng Mou, the founder and actual controller of Huahan Technology, has served as a member of the Shenzhen Municipal Committee of the Chinese People's Political Consultative Conference, a deputy to the Hunan Provincial People's Congress, and is now the executive vice president of the Shenzhen Experts and Talents Federation and an expert member of the Urban Water Supply and Drainage Standards Committee of the Ministry of Housing and Urban-Rural Development. After the successful reorganization of this case, Zheng continued to serve as the vice chairman and general manager of the company, responsible for the actual operation of the company's business. Entrepreneurs will regroup and lighten up, continue to innovate in the market, and make new contributions to economic development.
On May 11, 2020, the Opinions of the CPC Central Committee and the State Council on Accelerating the Improvement of the Socialist Market Economic System in the New Era was officially released, and the document proposed to "improve the bankruptcy system and promote personal bankruptcy legislation." Although the applicable entities are different, the core of the "rescue" value contained in the enterprise reorganization procedure and the personal bankruptcy system is highly consistent. The enterprise reorganization procedure and the upcoming personal bankruptcy regulations in Shenzhen will jointly build an effective judicial way to boost the development of the private economy and ensure the entrepreneurial innovation of entrepreneurs.
Explore innovative mechanisms linking market-oriented reorganization with rule-of-law reorganization
Out-of-court restructuring is a commercial negotiation conducted by the participants in accordance with market factors and based on their own interests. If the parties to the negotiations reach a consensus that can be brought into the reorganization process, the efficiency of the reorganization procedure will be greatly improved.
Before the case entered the judicial reorganization procedure, Huahan Technology actively sought out the restructuring party and planned the debt restructuring, and the parties formed a preliminary cooperation intention. The reorganization procedure fully absorbs and undertakes the results of the out-of-court reorganization work, including the review and confirmation of creditors' rights, asset verification and auditing, the selection of the reorganization investor, and the formulation of the draft reorganization plan, which greatly reduces the cost of reorganization, improves the efficiency of reorganization, and becomes the key to promoting the rapid and effective advancement of the case. The useful exploration of this case in practice provides an enlightening reference for the connection between debt restructuring inside and outside the courtroom and the construction of the pre-reorganization system in China.
Give play to the subjective initiative of judicial adjudication, balancing the interests and demands of all parties
Huahan Technology has a wide range of types of creditor's rights and complex structures. From the perspective of the types of creditors, including both financial institutions and private lending creditors, as well as operational creditors, the different types of creditors determine their interest demands and decision-making mechanisms, which to a large extent increases the difficulty of creditor communication; from the structure of creditors' rights, most of the claims are due to private lending, not only there are complicated interest relations, irregular formation of creditors and other issues, private lending creditors' strong resistance to enterprise bankruptcy, higher demand for repayment ratio, is one of the difficulties in this case. The repayment rate of ordinary creditors under the liquidation state of Huahan Technology is only 32%, and it also includes accounts receivable with a valuation of 690 million yuan, which is long and difficult to recover, which will inevitably lead to a significant decline in the repayment rate, trigger unstable factors from the creditor side, and intensify social contradictions.
In view of the above difficulties, the people's courts gave full play to the subjective initiative of the overall situation of judicial reorganization and economic development, and actively organized Huahan Technology to carry out a large number of communication and consultation work with the restructuring parties and creditors. Explain to creditors the necessity of reorganization and the adverse consequences of bankruptcy liquidation, help creditors identify reasonable claim boundaries, emphasize to debtors the necessity of comprehensively standardizing operation management, restoration and development of the main business, urge debtors to fully cooperate with all aspects of reorganization, demonstrate the value of enterprise assets and future reorganization effects with the restructuring party, strengthen the investment intentions of the restructuring party and strive for the restructuring party to share the future reorganization proceeds, unify the unanimous opinions of all parties on the restructuring and rebirth of Huahan Technology, and eliminate the actual resistance to the advancement of the reorganization procedure one by one. In the end, a reasonable balance of interests and demands of all parties was realized. Property-secured claims and tax claims were 100% repaid, and the repayment rate of ordinary claims reached 64%, more than doubling.
After voting, both the property secured creditor group and the tax claim group voted 100% to approve the draft reorganization plan, and the proportion of the number of people and the amount of the ordinary creditor group voting to approve the draft reorganization plan was as high as 96.97% and 98.42%, respectively. Huahan Technology Investor Group Meeting voted 100% to approve the adjustment plan of the rights and interests of investors in the draft reorganization plan, and the draft reorganization plan was jointly supported by creditors and passed by a high vote.
[Reporter] Yang Yizi
[Correspondent] Xiao Bo
【Author】 Yang Yizi
When the rule of law is carried out in Shenzhen
Source: South+ - Create more value