Renowned real estate companies applying for bankruptcy reorganization? Emergency response from R&F Real Estate: There is no reason for insolvency and normal operation | Information | Response
On July 13th, according to information disclosed on the National Enterprise Bankruptcy Reorganization Case Information Network, Guangzhou Fuli Real Estate Co., Ltd. was applied for bankruptcy reorganization by Guangdong Xiangzheng Trading Co., Ltd. and Guangzhou Guangfeng Concrete Co., Ltd. The handling court was the Guangzhou Intermediate People's Court in Guangdong Province.
According to publicly available market information, R&F Real Estate has responded to this matter: the above-mentioned incident is a bill dispute between Guangzhou R&F Real Estate Co., Ltd. and its subsidiary Guangzhou Tianli Construction Engineering Co., Ltd., Guangzhou Guangfeng Concrete Co., Ltd., and Guangdong Xiangzheng Trading Co., Ltd. During the execution of the settlement, a written settlement agreement was not signed due to the failure to reach an agreement on commercial conditions. During this process, Guangfeng Concrete and Xiangzheng Trading applied for bankruptcy liquidation to the Guangzhou Intermediate People's Court due to insufficient assets and lack of solvency of Guangzhou R&F.
What is being filed for bankruptcy reorganization? According to the relevant provisions of the Enterprise Bankruptcy Law of the People's Republic of China, if the debtor is unable to repay its due debts, the creditor may apply to the people's court for reorganization or bankruptcy liquidation of the debtor.
R&F Real Estate stated, "Currently, Guangzhou R&F's assets are higher than its liabilities, and there is no situation of insolvency and normal operation. There is no reason for bankruptcy; negotiations with Guangfeng Concrete and Xiangzheng Trading are actively underway for settlement."
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On the evening of July 13th, R&F Property announced on the Hong Kong Stock Exchange that the company had not received any court documents related to the accused application; Our company is currently negotiating with the applicant regarding several bill disputes with an amount of approximately RMB 20 million, but no settlement agreement has been reached; Our company's net assets are positive and there is no situation of insolvency; The company's business activities remain normal.
It is worth noting that this is not the first time that Guangfeng Concrete and Guangdong Xiangzheng have filed a bankruptcy application against the R&F series company in response to this dispute. It is reported that at the beginning of the year, the two companies respectively applied to the court for bankruptcy liquidation of Tianli Construction on the grounds that the respondent Tianli Construction was unable to repay its due debts and its assets were insufficient to repay all debts.
As of the close on July 13th, R&F Real Estate closed at HKD 1.23, up 2.5%.
According to the 2022 annual report data previously disclosed by R&F Real Estate, the company's operating revenue in 2022 was 35.19 billion yuan, a year-on-year decrease of 54%; The company's owners should account for a loss of 15.74 billion yuan, a year-on-year decrease of 4.4%; The gross profit margin is 10.87%, a year-on-year decrease of 17.56 percentage points. In addition, the total debt of R&F Real Estate has decreased from a high of 19.1 billion yuan in 2019 to 126.7 billion yuan in 2022.
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According to data released by R&F Real Estate on the Hong Kong Stock Exchange on June 9, 2023, the total sales revenue of R&F Real Estate in May 2023 was approximately RMB 1.54 billion, with a sales area of approximately 122100 square meters. As of the end of May, the cumulative total sales revenue was approximately RMB 10.56 billion.
When releasing last year's annual report, R&F Real Estate also pointed out that in the current market environment, high debt levels are not sustainable, so strict measures have been taken to quickly reduce debt balance, including accelerating asset sales and utilizing existing cash resources, rather than further acquiring more land reserves or investing in long-term assets. The management will continue to explore available solutions to further reduce the debt amount to an acceptable level.
Zhongzhi Research Institute stated that real estate companies should not only focus on the present, but also plan for the long term. On the one hand, seize urban opportunities and accelerate sales collection; Investment focuses on high-energy cities and regional deepening; Fully utilize policy support, actively raise funds in areas such as credit, bonds, and equity, and maintain financial stability. On the other hand, business strategies should be balanced, with a focus on developing operational businesses; Applying value engineering methods to enhance product and cost capabilities, thereby enhancing competitiveness.