Can reorganization save backgammon?
Author | Yu Qi Lu Yongzhi
Editor丨Wu Lijuan
Source | Bronco Finance
The reorganization of BBK (002251.SZ), the "first share of private supermarkets", has finally settled.
On October 30, BBK issued an announcement on the court's decision to accept the company's reorganization, because the company was ruled by the court to accept the reorganization, according to the regulations, the company's shares were suspended for one day on October 30, and since the resumption of trading on October 31, the delisting risk warning was implemented, the stock abbreviation was changed to "*ST Bugao", and the daily rise and fall of the stock price was limited to 5%.
After the completion of the reorganization, BBK will apply to the Shenzhen Stock Exchange to cancel the delisting risk warning, and the company's shares will resume normal trading after approval.
BBK's restructuring began with a loan of 3.64 million yuan.
The arrears of 3.64 million were applied for reorganization
The creditor who applied for reorganization this time is Dragon Food, a supplier of BBK.
Specifically, on May 27 and July 12, 2022, Dragon Food and BBK signed the "Purchase and Sales Contract", "Comprehensive Service Agreement", "Contract Declaration Summary Form" and other relevant attachment agreements, stipulating that Dragon Food would provide goods to BBK and BBK would sell them in relevant stores.
Dragon Food provided the goods to BBK as agreed, completed the relevant settlement procedures with it, and confirmed the payment that should be paid, but BBK did not pay to Dragon Food as agreed.
As of March 16, 2023, BBK owes a total of 3.6422 million yuan to Dragon Food.
According to the relevant provisions of the Enterprise Bankruptcy Law, if the debtor is unable to pay off the debts due and obviously lacks solvency, the creditor may apply to the court for reorganization.
In the first half of the year, BBK achieved operating income of about 1.801 billion yuan, a year-on-year decrease of 69.32%; Net profit attributable to shareholders of listed companies was -449 million yuan, turning from profit to loss. In addition, there are short-term borrowings of 6.245 billion yuan, notes payable of 104 million yuan, accounts payable of 2.504 billion yuan, contract liabilities of 694 million yuan, etc., with total current liabilities of 13.926 billion yuan and non-current liabilities of 6.578 billion yuan.
On July 7, BBK received the "Notice" served by the Xiangtan Intermediate People's Court, stating that Dragon Food applied to the court for the reorganization of BBK on the grounds that the company could not pay off its due debts and obviously lacked solvency.
Dragon Food believes that although BBK has been unable to pay off its due debts, as one of the leading enterprises in Hunan's consumer and retail business, it has the possibility of rebirth and rescue.
Reorganization is different from bankruptcy liquidation and is a judicial procedure aimed at saving the debtor's enterprise and restoring the company's sustainable profitability.
The Xiangtan Intermediate People's Court held that BBK could not pay off its debts due and obviously lacked solvency, which met the conditions for bankruptcy reorganization. BBK shares in the supermarket, department store business for many years, in Hunan, Guangxi and other places of the retail market occupies a large market share, the store is located in the city's core business district or has a good potential for development of the commercial center, the geographical position is superior, has a certain market competitive advantage. During the pre-reorganization period, all work was carried out in an orderly manner, and the recruitment of investors progressed smoothly, which can be determined to have reorganization value and the possibility of rescue.
As of October 30, the interim manager and BBK have contacted and communicated with more than 30 prospective investors, and received the registration materials submitted by 26 prospective investors, and some of them have carried out due diligence on the company.
The Xiangtan Intermediate People's Court has allowed BBK to borrow less than 1 billion yuan to restore and maintain the supermarket business operation. At present, the funds have been put in place, and BBK will resume the business of supermarket stores in batches and continue to maintain the normal operation of the department store business.
Why is backgammon "low"?
BBK was founded in March 1995 in Xiangtan, Hunan, headquartered in Changsha, Hunan, and the founder was born in 1968 in Xiangxiang, Hunan Province.
After landing on the Shenzhen Stock Exchange in 2008, with the blessing of capital, in 2019, BBK's revenue hit a record high of 19.725 billion yuan and a net profit of 182 million yuan.
Source: Wind
In 2013, BBK spent a lot of money to recruit teams from Alibaba and IBM to set up its own e-commerce company and build a cross-border e-commerce platform "Cloud Monkey Global Purchase". In addition, BBK has also established a mobile payment company to try to open up O2O across all channels, all formats and all categories.
However, this wave of exploration and attempts at e-commerce in the traditional retail industry, most companies, including BBK, have failed.
In 2017, with the rise of the concepts of "new retail" and "smart retail", major chain supermarkets have become fragrant and sweet, which are popular among Internet giants. After that, Tencent and JD.com invested 890 million yuan and 740 million yuan respectively to invest in BBK and became its important shareholders. However, in April 2022, Tencent and JD.com reduced their holdings in BBK, and their holdings fell to less than 5%.
However, with the continuous growth of revenue, Wang's confidence in physical retail is also growing. In 2019, at the opening site of the Jiarun multi-benchmark store on Renmin Middle Road in Changsha City, Wang Cao shouted, "Physical retail ushered in a new window period, and BBK will seize the opportunity to open 100 stores nationwide in 2019." ”
BBK has actually exceeded expectations, with its store size reaching a peak of 420 in 2020, including 369 supermarkets and 51 department stores.
However, the epidemic came suddenly, and under the high pressure of prevention and control, BBK, like all brick-and-mortar retailers, struggled to operate. Its revenue fell by 20% in 2020, and in 2022, it will drop by more than 55% from its peak in 2019, directly returning to the level of 2011.
While revenue plummeted, net profit turned from profit to loss in 2021, with a direct loss of 2.52 billion yuan in 2022, a loss of more than the total net profit of the past ten years.
Source: Wind
In fact, while doing supermarkets, BBK has also been involved in many commercial real estate projects, and from 2008 to 2017, its cumulative investment in real estate exceeded 4.1 billion yuan. At the end of 2022, BBK's total assets were 27.906 billion yuan, of which about 15 billion yuan were investment real estate, and these assets have been basically used for bank loan collateral.
On the one hand, physical retail has been hit hard by the epidemic, and on the other hand, the real estate policy has been gradually tightened, and the two trump cards in Wang Chong's hands have become a burden that shackles the company's development in the past two years.
In response to the annual report inquiry letter in July this year, BBK admitted that due to the slow recovery of consumption, the transformation of the traditional retail industry, and the company's large investment in heavy assets, the company has encountered a phased liquidity shortage.
In 2022, the company will close 139 stores with no hope of turning around, and concentrate on maintaining the dominant position in the Hunan and Guangxi markets.
In addition, BBK also mentioned that with the support of the government and financial institutions, the company's phased liquidity shortage has been alleviated.
Xiangtan state-owned assets have been supported by 2 billion
Since the financial difficulties, BBK has contacted Hunan state-owned assets many times and received assistance from state-owned assets.
For example, on June 14, 2022, Xingxiang Group and Hunan Lugu Development Group signed the "Agreement of Intent" with BBK and BBK Group respectively, and will provide a total of 2 billion yuan of liquidity support to the latter two.
BBK announced that it intends to carry out relevant cooperation with Xingxiang Group, including but not limited to financing from Xingxiang Group or other related cooperation.
Xingxiang Group is 100% owned by the State-owned Assets Supervision and Administration Commission of Hunan Province, and as a provincial state-owned capital operation platform, Xingxiang Group has participated in the reform and reorganization of a number of Hunan core state-owned holding listed companies such as Xiangdian Electric Co., Ltd., and can be called the main force of local capital operation and state-owned assets reform.
At the signing ceremony, Wang said that due to the strategic adjustment of the national macroeconomic policy, and the impact of unfavorable factors such as the normalization of the epidemic, BBK has indeed experienced a tight operating liquidity situation in the near future, and the signing will help the company climb over the hurdles.
On the second day of the signing ceremony, BBK announced that Wang Fill's shareholding ratio changed from 69.96% to 57.45%, and he is still the largest shareholder of the company's controlling shareholder, BBK Group; Zhang Haixia's shareholding ratio changed from 18.04% to 14.82%, becoming the third largest shareholder.
In addition, a few days after the above-mentioned signing ceremony, the board of directors of BBK passed a resolution to borrow 827 million yuan from Xingxiang Group for operating funds, with a loan term of no more than 3 years.
On January 9 this year, BBK suddenly disclosed a suspension announcement before the market, because the company was planning a change of control. After five trading days of suspension planning, BBK announced on January 15 that BBK Group intends to transfer 10% of the company's shares to Xiangtan Industrial Investment by way of agreement transfer, with a total transfer price of 518 million yuan.
Xiangtan Industrial Investment was established on January 9 this year, and its main investor, Xiangtan Dianhua Industrial Investment Holding Group Co., Ltd., is wholly owned by Xiangtan State-owned Assets Supervision and Administration Commission.
Judging from the transaction between the two sides, on the surface, BBK let Xiangtan state-owned assets actually control it at the smallest possible cost, but it actually found a backer for itself.
Industry insiders pointed out that the ownership of Xiangtan state-owned assets is expected to give BBK effective help in terms of funds and resources, and help the company grasp the growth opportunities brought by the recovery of the industry while optimizing its financial situation and strengthening its ability to continue operations.
However, with the entry of Xiangtan state-owned assets, Wang and his wife cashed out 518 million yuan. In March 2023, BBK Group reduced its holdings and cashed out 92.2921 million yuan. In the two transactions, Wang and his wife cashed out a total of more than 600 million yuan.
After the share transfer, Xiangtan Industrial Investment Investment holds 86.39 million shares of the company, accounting for 10% of the total share capital of BBK. BBK Group gave up the voting rights corresponding to the remaining 23.06% of the company's shares. Xiangtan Industrial Investment and Investment became the controlling shareholder of BBK, and Xiangtan State-owned Assets Supervision and Administration Commission became the actual controller of the company.
Now, under the leadership of Xiangtan Industrial Investment and Investment, can BBK successfully restructure and continue to be BBK in the field of supermarkets and capital markets? Let's talk in the comment section.