New Founder Breaks Out of the Shell: 5,000 Words Of Detailed Service Trust "God Assists"

On October 21, founder group reorganization project ushered in the latest progress, founder group and other five companies according to the reorganization plan, officially completed the establishment of the new founder group. This means that the restructuring and rebirth of Founder Group has taken an important step.

From filing for bankruptcy and reorganization, to the establishment of a new entity to embark on rebirth, Founder Group took three years. Service trusts play a vital role in this. The author understands that Founder's reorganization adopts a "sale reorganization" model, and also adds a "heyi property rights trust" scheme to allow trust companies to play a license advantage to participate in the disposal of special assets for enterprise bankruptcy reorganization.

Heyi property rights trust is a kind of service trust, and the service trust is one of the original business of the trust, and the trust company provides entrusted management services to manage and dispose of the trust property according to the trust document. According to the report disclosed by the Trust Industry Association, trust companies are increasing the layout of asset securitization trust and property rights trust business.

The provider of the above-mentioned "Heyi Property Rights Trust" scheme is Ping An Trust. This year, Ping An Trust assisted Ping An Group in participating in founder reorganization and established the industry's first service-type property rights trust in bankruptcy reorganization. It is worth mentioning that Founder's restructuring property rights trust products serve nearly 500 creditors, and the original book value of the entrusted property scale is tens of billions of yuan, Ping An Trust has pioneered the property rights trust support system by exerting its unique scientific and technological advantages, providing strong support for the restructuring landing.

This is a high-quality case of a trust company returning to its original business, and it is also a practical model for trust companies to explore the way of special asset restructuring.

Zheng Yan, general manager of Ping An Trust's specially funded North District Operation Center, said, "For super-large enterprises, almost no investor has the ability or willingness to eat the entire Big Mac. In addition to the reserved assets selected by the investor, other assets to be disposed of are not without economic value, but cannot be disposed of immediately in the short term. With the advantages of the flexible system of the trust and the characteristics of risk isolation, the trust company will be able to solve the pain points of all participants in the bankruptcy reorganization. The introduction of this financial instrument will provide new solutions to the difficult problems in bankruptcy reorganization. ”

The Founder restructuring project is a microcosm of Ping An Trust's "service + finance" strategic transformation and special asset market and service trust business.

The author understands that Ping An Trust has launched a new round of strategic transformation since 2019, taking the special asset business as one of the pillar businesses of the company's transformation. After two years of practical exploration, this strategic positioning has not changed, but the business strategy has undergone three upgrades with the change of policy orientation and market trend, that is, from the ten major models based on investment and financing business, to the "special capital +" strategy, the combination of special capital business capabilities with real estate, infrastructure, PE, and standard product investment capabilities, and then to the "service + finance" model, combining the advantages of the trust trustee system, the special capital business capabilities and investment and financing capabilities.

Zheng Yan said that she hopes to rely on the company's professional experience, system advantages and collection capabilities, and continuously help large enterprise groups to reorganize bankruptcy by providing other beneficial property rights trust solutions, and create a leading brand of service trusts in the field of special capital.

A few days ago, Zheng Yan's team published the latest professional research article, which detailed the innovative application mode and unique functions of the service trust in the bankruptcy reorganization scenario for the benefit of readers.

"Bankruptcy Reorganization Must See - How Service Trusts God Assists!" The full text is as follows:

1. Background of bankruptcy reorganization and trust business

(1) Macroeconomic adjustment, the scale of non-performing assets grew rapidly

In recent years, under the background of economic supply-side reform, the economic structure has been deeply adjusted, the risk of resource misallocation has been accelerated, and the scale of non-performing assets has grown rapidly under the background of overall macroeconomic adjustment. The sources of non-performing assets mainly include the non-performing assets of banks, non-bank financial institutions and non-financial institutions (enterprises). By the end of 2020, the scale of non-performing assets of commercial banks nationwide reached 2.71 trillion yuan, with a ten-year annualized growth rate of 20.56%; 324 trust plans defaulted in 2020, involving an amount of 139.438 billion yuan, an increase of 9.43% and 15.80% respectively year-on-year.

(2) Bankruptcy cases showed an upward trend, and the number of trial completion and reorganization cases increased simultaneously

In recent years, the number of enterprise bankruptcy reorganization cases has increased year by year, with 5183 bankruptcy reorganization cases in 2020, an increase of 133% over the whole of 2019. From 2007 to 2020, the reorganization plans of a total of 73 A-share listed companies in China were approved by the court, of which 13 were approved in 2020, accounting for 17.81% of the total.

In 2020, courts across the country concluded 13,416 bankruptcy cases, of which 728 were bankruptcy reorganization cases, accounting for about 5.4%.

(3) It is inevitable that service trusts will enter the market

Different from the traditional bankruptcy reorganization of small and medium-sized enterprises, more and more large or super-large-scale enterprise groups, due to the business idea of "diversified operation and diversification of business risks", have many debts, unreasonable structures, and high financial costs, and eventually evolve from liquidity risks to bankruptcy endings, such as Founder Group.

For such mega-enterprises, few investors have the ability or willingness to eat the entire Big Mac; except for the reserved assets selected by investors, other assets to be disposed of are not without economic value, but cannot be disposed of immediately in the short term. Where these retained assets go is often an obstacle on the road to bankruptcy and reorganization of super-large enterprises, and even delays the bankruptcy reorganization process.

As a financial company, under the background of policy encouragement, with the advantages of the flexible system of trust and the characteristics of risk isolation, the trust company will be able to solve the pain points of all participants in bankruptcy reorganization, and the introduction of this financial instrument will provide new solutions to the problems in bankruptcy reorganization.

2. The use of service trusts in bankruptcy