Li Yunfeng, the former chairman of Nanchang Rail Transit, was dismissed after investigation, and the issuance of 3 billion corporate bonds was delayed

Reporter Zhang Xiaodi

Li Yunfeng, chairman of Nanchang Rail Transit Group (hereinafter referred to as "Nanchang Rail Transit"), was dismissed after being investigated. On October 25, the Nanchang Rail Transit Announcement said that the Nanchang Municipal Committee of the Communist Party of China decided to remove Li Yunfeng from the post of secretary of the Nanchang Rail Transit Committee of the Communist Party of China; at the same time, the Nanchang Municipal People's Government decided to remove Li Yunfeng from the post of chairman of the Nanchang Rail Transit Committee.

In this regard, Nanchang Rail Transport said that at present, Wan Xiankui, deputy secretary of the party committee and general manager, presides over the work, the company's current operating order is good, and the dismissal of former director Li Yunfeng will not have a significant adverse impact on his company's production and operation, financial situation and solvency.

On August 5, 2021, the website of the Jiangxi Provincial Commission for Discipline Inspection and the Provincial Supervision Commission announced that Li Yunfeng was involved in serious violations of discipline and laws and was undergoing disciplinary review and supervision and investigation by the Nanchang Municipal Commission for Discipline Inspection and the Municipal Supervision Commission. Since July 2016, Li Yunfeng has served as the party secretary and chairman of the board of directors in Nanchang Rail Transit.

Public information shows that Nanchang Rail Transit was established in 2008 and is a wholly-owned subsidiary of the State-owned Assets Supervision and Administration Commission of Nanchang City.

The interface news reporter noted that when Li Yunfeng was investigated, the corporate bonds of no more than 3 billion yuan in Nanchang rail traffic were applying for issuance, and because Li Yunfeng was investigated, it also affected the progress of the bond issuance.

According to the relevant announcement, on June 22, 2021, the State-owned Assets Supervision and Administration Commission of Nanchang Municipality approved the issuance of corporate bonds of no more than RMB3 billion (including RMB3 billion) on the Shanghai Stock Exchange.

According to its prospectus, the 3 billion yuan of bonds, after deducting the issuance fee, 2.1 billion yuan is intended to be used to repay the principal and interest of its interest-bearing debt, and no more than 900 million yuan is intended to be used to supplement working capital.

The interface news reporter learned from industry insiders that the bond was originally planned to be issued at the end of November 2021, but due to Li Yunfeng's investigation, the Shanghai Stock Exchange issued feedback twice on August 10 and September 9, 2021, requesting that the specific circumstances of Li Yunfeng's investigation be supplemented in the bond issuance documents, and the possible major adverse impact on the operation, production and operation, financial status and solvency of the Nanchang Rail Transit organization, as well as the verification of Li Yunfeng's investigation. The effectiveness of the alternative measures signed in the relevant documents of this bond, etc.

On September 18, Nanchang Rail Exchange completed the second feedback response of the Shanghai Stock Exchange. On the same day, an explanation of Li Yunfeng's investigation was added to the prospectus.

The person said that due to the investigation of Li Yunfeng, two feedback and replies and other matters have extended the original planned issuance time of the bond by one month, and may be pushed to the end of December. Li Yunfeng's investigation had nothing to do with matters related to the nanchang rail deposit bonds and the bonds being planned to be issued.

As the only entity in the investment, construction and operation management of Nanchang Metro project, Nanchang Rail Transit has considerable financial strength, as of mid-2021, the total assets of Nanchang Rail Transit have reached 97.263 billion yuan, the total liabilities are 48.036 billion yuan, and the asset-liability ratio is 49.39%.

At present, there are 13 railway bonds in Nanchang, with a total balance of 12.470 billion yuan, and the weighted cost of bond issuance is 4.33%. In addition to existing bonds, as of mid-2021, Nanchang Rail Transit has received a total of 110.096 billion yuan of credit lines from 22 banks such as China Development Bank, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, of which 36.183 billion yuan has been used and the remaining 73.913 billion yuan. Among them, the credit line of CDB is as high as 42.450 billion yuan and the bank of China is 10.419 billion yuan.

In terms of operation, from 2018 to the first half of 2021, Nanchang Rail Transit has maintained profitability, but the net profit has declined year after year, down 33.98% year-on-year in 2018, 22.52% year-on-year in 2019, and 35.23% year-on-year in 2020. In the first half of 2021, Nanchang Rail Transit achieved a net profit of 127 million yuan, an increase of 186.02% year-on-year.

In recent years, the scale of investment expenditure on Nanchang rail transit has gradually increased, of which the cash flow generated by Nanchang rail investment activities in 2017 was -4.801 billion yuan, in 2018 it was -5.291 billion yuan, in 2019 it was 6.666 billion yuan, and in 2020 it was -8.725 billion yuan.