On the evening of October 8, Fantasia issued another announcement appointing HuaLian (China) as the financial adviser to assess the Group's capital structure, assess the Group's liquidity and explore all feasible solutions to alleviate the current liquidity problems, and reach the best solution for all stakeholders as soon as possible.
Warian mainly provides debt restructuring and management, mergers and acquisitions, capital market financing, and transaction valuation and valuation services, and has previously been hired as financial advisors by Evergrande, Kaisa, Taihe Group and Luckin Coffee respectively.
A little earlier than the announcement, Fantasia founder Zeng Baobao sent a "family letter" to employees, calling employees "Flowers" in the letter, imploring everyone to give the company time and trust.
The Fantasia crisis erupted on the evening of October 4, and Fantasia announced that a balance of DOLLAR notes had not been redeemed on schedule. The announcement explained that the company was affected by multiple factors such as the recurrence of the epidemic, industry policies and macroeconomics, and liquidity was tight in stages.
At the same time, Country Garden Services also announced that Fantasia Holdings' Colour Life Services failed to repay the loan of RMB700 million lent by Country Garden Property Hong Kong to the other party on 30 September 2019 on 4 October 2017.
On the evening of October 4, two debts overdue, Zeng Baobao posted a movie poster of "Darkest Hour" on Weibo, suspected of being in a state of mind at that time. But soon after, she posted two circles of friends, giving her a clearer and more positive attitude towards the issues of the moment.
She said in a circle of friends: "I myself eat, drink and sleep everything normally, and the natural weight loss effect is excellent." For a few days, there were all kinds of crying and grumpiness, but there was no depression. It belongs to the human body to initiate a normal emergency response. I am such a virtuous person, the cat is lost, the blind box doll is gone, the chocolate can not eat more such a small sesame thing, will howl for a few days can not pass, and in the face of any big thing, is not a person who does not need to help run. There is no conspiracy, premeditation, political gossip, if the strategy, transparent, frank face, solve the problem, I think is the only solution. ”
The attitude towards the crisis is clear, and the way to deal with the crisis, Zeng Baobao has actually made a choice.
The Economic Observation Network has learned that at present, in the decision-making priority of Fantasia, the customer and employee teams are in the first echelon, for financial institutions, Fantasia prefers to gain space through extension, and more cash flow sources may be achieved by introducing partners in the project.
Countermeasures: guarantee the start of construction, guarantee salary, talk about the extension period, and attract investors
Before the overdue of the notes on October 4, Fantasia received a consideration of 3.3 billion yuan through the sale of Colorful Life's core asset, Neighbor Leyu Country Garden, but the transaction did not help Fantasia solve the urgent need for debt.
Zeng Baobao said in the "family letter" that in the early morning of September 29, S&P suddenly and sharply downgraded the company's rating, resulting in serious restrictions on the company's domestic and foreign financing crossover, and a stage of liquidity tension.
In fact, Fantasia was in the window of time for a new financing, and the rating was suddenly downgraded, making it impossible to connect the old and the new.
"If you only have 50 yuan in your pocket now, but you need to spend 100 yuan next, of which 50 yuan is to be returned to the financial institution, then will you give the 50 yuan to the financial institution first?" A person close to the decision-making level of Fantasia admitted that Fantasia's top priority is to ensure the start of work and the salaries of employees.
"Take 45 of them out to pay for the project, and the other 5 yuan to pay the employees." If your building is completed and delivered, and your team is working together to solve the problem, the worst outcome is nothing more than paying off the debt half a year late. If you really have the only money you have on hand to pay off the debt, you will find that the problem caused by this is even more serious - there is no money to pay for the project, the house cannot be built and cannot be sold, no one is willing to buy your house in the future, and the employees cannot get their wages and have left."
According to the 2021 mid-year report, as of June 30 this year, Fantasia has a total of 47 projects or projects under construction, with a total construction area of 8.27 million square meters, all projects will be completed by 2023, of which 13 are expected to be completed in the second half of this year.
In terms of salary protection, the total cost of employees disclosed by Fantasia in 2020 was 2.503 billion yuan.
According to the person, the self-help measures currently adopted by Fantasia also include negotiating extensions with financial institutions and introducing investors to high-quality projects. "Strictly speaking, a 6-month extension is no problem. As long as core assets remain in value, all creditors are safe. The person believes.
Earlier, some media reported that Fantasia was considering selling two projects, Guoxiang Mansion and Guoxiang Yunzhu in Beijing's Miyun District. The person said that Fantasia has not yet made a decision on this, but Fantasia has taken stock of the assets in hand, and for high-quality assets, Fantasia may introduce partners, and the two sides will share debts and share benefits.
In addition, in view of the situation that the overdue of the bills may dampen the confidence of home buyers, the current measure taken by Fantasia is to feedback the construction progress of the construction site to the buyers on time, and to convey the determination of Fantasia to the customer to deliver the guarantee.
Crisis Source: External Factors are Accelerators Internal factor adjustments still take time
As for the reasons for the outbreak of fantasia's liquidity crisis, the person said: "External factors such as regulatory upgrades, credit tightening, and shocks in overseas dollar bonds are accelerators, and more problems may be that after excessive borrowing in 2017 and 2018, some investments have gone wrong." ”
Since 2012, Fantasia has opened the "2012-2020 Strategic Planning", at that time, Fantasia has stated that it is transforming into a financial service provider driven by finance, service as the core and developed as a tool, and the core competitiveness of Fantasia in the future is not in development, but in service and finance.
In 2016, the year of the end of the first phase, Fantasia disclosed that in addition to real estate development, Fantasia disclosed that in addition to real estate development, fantasia business also includes property service color life group, business community asset service Meiyijia, community financial group and financial platform "Qianshenghua", commercial operation brand "Peanut Tang", "Red Tang" and "Fantasia World Outlet", tourism Fantasia Cultural Tourism Group, pension service Fortai Nian and education industry.
According to Fantasia's annual report, from 2016 to 2021, Fantasia's total liabilities increased from 36.6 billion yuan to 81.2 billion yuan, of which the total debt in 2017 and 2018 increased by 40% and 46% year-on-year, respectively, much higher than 0.02% in 2019 and 8.3% in 2020.
At the same time, fantasia's planned land reserve construction area has also increased from 14.98 million square meters in 2016 to 17.09 million square meters, of which the Chengdu-Chongqing area has always been the focus of Fantasia's land acquisition, and from 2016 to 2018, Fantasia's land reserve in the region has increased from 5.61 million to 8.21 million square meters.
However, along with business diversification, the proportion of Fantasia's development revenue in 2017 and 2018 is declining, and from 2016 to 2020, Fantasia's property development revenue accounts for about 77%, 67%, 61%, 69% and 76% of total revenue, respectively.
"There were several problems in the early days of the fantasia year: first, there was no sense of purpose, and there were too many things that I wanted to do; second, I did not do deep cultivation in the core business and lacked core capabilities. Diversified business can be expanded, but the premise is that there must be a core business, rather than a long-term struggle with the problem of light assets or heavy assets. The aforementioned person said.
In a 2020 report, yy rating pointed out that the drawback of the positioning of mid-to-high-end residential and tourist residences is that it has too much difficult suburban land, and from the perspective of the dematerialization rate, the sales situation of these projects is not optimistic.
The slow progress of development will inevitably lead to high capital precipitation costs.
It is no accident that Zeng Baobao chose to return in 2019, after 2019, Fantasia began to adjust its previous business strategy, residential development turned to just need and accelerated the turnover cycle, and its new land acquisition project was shortened from land acquisition to opening to 7.4 months.
YY rating statistics show that Fantasia's inventory turnover in the first half of 2020 has improved significantly, and with the decline of the interbank turnover rate, Fantasia has returned from slow turnover to normal levels. In addition, in the land, Fantasia has also changed its historical preference of gathering in the suburbs in the past, and some of the newly purchased land plots are closer to the urban area, and some of them are still in the relatively central area of the satellite city although they are still in the suburbs.
Judging from the 2021 mid-year report, Fantasia's sales performance was relatively good, and the contract sales amount in the first half of the year was about 28.117 billion yuan, an increase of 60.1% year-on-year.
However, for now, the strategy adjustment of Fantasia after 2019 has not prevented the outbreak of historical problems. The aforementioned person said that Zeng Baobao has been away from Fantasia for too long, and this return, she needs to re-consolidate the corporate culture, adjust the operating structure, and solve the problems left over from history.
"In fact, she may have another year, but all of a sudden she encountered the overdue bill, so the outbreak of internal factors was accelerated under external factors."