Boxing Land 1.2 billion Yuan loan explosion financial platform cannot withstand the debt storm

This time, Boa Xing Land’s familiar “right-handedness” may not work.

The Boning system, which is used to trying to realize debt segregation, stepped on an invisible “thunder”.

In mid-March, Boxing Land received a notice from a creditor bank related to a loan financing between its indirect subsidiary, Shenzhen Jilting Industrial Co., and the bank.

Specifically, the bank, as a creditor, granted Shenzhen Jilting the financing of a loan with an outstanding principal of 1.197 billion Yuan, and Shenzhen Jilting failed to repay the loan in a timely manner in accordance with the financing, in violation of the relevant liability. As of now, Boxing Land is negotiating different repayment plans with creditors.

It is worth noting that Boxing Land has previously sold its Boning Times Bay project in Shantou to pay off debts to Boxing Finance, mortgages to Xiamen International Trust and to offset its own receivables. However, as an affiliated company of Boxing Finance, the elder brother was in trouble and the second elder brother helped. Finally, the project transfer was returned to the family, and the debt problem of Boxing Land at that time was temporarily solved.

But this time, faced with third-party bank creditors and nearly 1.2 billion Yuan of loan debt, can Boxing Land still “take a shortcut” to resolve?

Bury mines in the dark

As a subsidiary company of Boxing Land, Shenzhen Jilting was established in 2018 with a registered capital of 1.2 billion Yuan. It is 100% controlled by Boxing Industrial Group, which is 85% held by Boxing Holdings. The legal representative of Shenzhen Jilting is Liu Bing, executive director of Boxing Holdings.

At present, it is one of its projects, Junkie B210-0024 Block Urban Renewal Unit that leads Shenzhen Jilting into the current market troubles. This old renovation project was formerly known as Goaded Electronic Market, Huaqiangbei “No.1 Business District”, which is similar to the Ever Grande Business Center project and close to Huaqiangbei subway station. In 2016, the project was included in the first batch of urban renewal plans.

Initially, the main applicant for the project was Shenzhen Junkie Investment Co., LTD., a subsidiary of Heaney Group. The demolition and reconstruction land area of the project is 7736.4 square meters, with a total floor area ratio of 82,400 square meters (including underground commercial building area), and the above-ground commercial, office and hotel industry accounting for 39,000 square meters.

It is worth noting that the plot ratio of the project reaches 12.8. According to the plan, a super high-rise building with a height of about 240 meters is planned for the later stage of the project.

The project was also involved in an auction in November 2022.

At that time, Shenzhen Jilting put the project up for auction on Alabama, with a price of 100 million Yuan and a markup of 1 million Yuan. However, on the day of the auction, the project was withdrawn for unknown reasons.

At that time, some market voices raised questions: The project site is more advantageous in Huaqiangbei North area of Fustian, Shenzhen. Besides, the former Ago Key Take Electronic Market and Causeway Bay Square have been completed, and now most of the demolition preparations have been completed. Why did you choose to sell this site?

An industry insider told Viewpoint New Media that the current project is in a state of “half rotten end”, the construction cycle has not been completed, and naturally there is no chance of earning money. The sale of the project was linked to the debt pressures the Yao brothers were facing at the time and to a bank loan.

For this old Huaqiangbei North renovation project, there is market news that Boxing Land borrowed a loan of nearly 1.2 billion Yuan from a bank, and officially made the loan in October 2020. It is worth noting that this loan is a “land post mortgage”.

The biggest risk of “land mortgage” lies in whether the land mortgage can be handled smoothly. As a more effective risk control type in real estate financing projects, if there is a problem with land mortgage, the apparent mortgage loan is actually more like a credit loan.

For Boxing Land, such post-mortgage operation can obtain cash flow at the early stage of project progress, borrow other people’s financial resources to push forward the project, and relieve its pressure on construction.

However, according to the market news, Boxing Land only has the construction land planning permit at hand at present, and the land certificate has not been obtained within the original schedule, which undoubtedly lays a hidden mine for the project construction.

At present, the bank lending time has been close to three years, but still did not get Boa Xinhua geography should provide collateral, loan risk is self-evident. Therefore, Boxing Land this time by the bank for this nearly 1.2 billion Yuan of loans “query”, not without reason.

Have no excuse

The 1.2 billion Yuan loan saga follows a similar default involving another Boxing subsidiary.

In early March, Hunan Melina Real Estate Co., a subsidiary of Boxing Land, received an early maturity notice on loan financing with an outstanding principal of about 227 million Yuan. The Notice of Maturity alleges that Hunan Mina breached its obligations by failing to repay the facility in a timely manner, and the creditor therefore decided to exercise its acceleration right to demand early repayment of the total principal amount under the facility and all overdue interest.

Like Shenzhen Jilting, Hunan Melina is negotiating different repayment plans with creditors to raise funds to cover the total outstanding.

In addition, in October 2022, Boxing Land plans to sell all the shares of its subsidiary Shantou Taizhong Technology Co., LTD for 2.304 billion Yuan, namely the Boning Times Bay Project in Shantou, Guangdong, the last land parcel taken by Yao brothers before they split their family, to repay the debts owed to Boxing Finance and offset the receivables of Boxing Land.

In these cases, however, the sale of Boning Times Bay is different from the loan defaults faced by Shenzhen Jilting and Hunan Mailing, which involved a left-handed deal led by Yao Jeanie of the Boning Group.

Such a Noonan is not uncommon in Boning’s large structure. In September last year, a one-month-old company called Shenzhen Zima Commercial Management Co., Ltd. bid for 142 million shares of Boning, a subsidiary of Sheening, at auction for 1 billion Yuan.

Behind the deal, Shenzhen Zima Business Management, the “born” of the enterprise in the market has also sparked intense discussion: Shao Nene shares of the equity auction may also be an internal trading bureau. Data shows that the actual control of the enterprise is Liao Nan gang, and its control of listed companies and related engineering companies more or less related to the Boning Department.

Among them, Biotech International, a listed subsidiary of Liao Nan Steel, had a cross-shareholding relationship with Yao Jeanie at the time. As of the end of 2021, Yao Jeanie holds more than 7% of the equity of Biotech International; in addition, Biotech International holds 0.27% of the equity of Boxing Financial.

Looking back at the default situation faced by Shenzhen Jilting and Hunan Melina, the involvement of third-party creditor banks has become the biggest key to the current explosion of Boxing Land. Boxing Finance, a financial platform that relied on Boning’s system structure and supported its bottom for a long time in the past, is not included in the scope of debt resolution. This time, Boa Xing Land’s familiar “right-handedness” may not work.

 

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