On May 25, Shandong Iron and Steel Group Co., Ltd. (hereinafter referred to as Shan Gang Group) and Industrial and Commercial Bank of China signed a $ 26 billion framework agreement on market-for-equity swap in Beijing. At this point, the country has 10 iron and steel enterprises and banks signed a debt-equity swap agreement.
Hill Steel Group official WeChat that the agreement will effectively improve the corporate loan structure, reduce the financial burden of enterprises. According to the Shandong Provincial Committee of the "Daily News" reported that the main mode of cooperation of the agreement is the ICBC subordinate institutions directly invest in members of the Mountain Group members, while the establishment of limited cooperation and table funds as a supplement to the existing shares of Shanxi Steel Group into Investment equity, reduce the Group's asset-liability ratio of nearly 10%, the program implementation period is greater than or equal to five years, the interest rate is expected to 0.5-1 percentage points lower than the cost of bonds over the same period.
China Iron and Steel Industry Association, director of financial assets, Chen Yuqian accept the new financial interview, said the agreement mentioned interest rate refers to interest-bearing debt, although the debt into equity, but not dividends, but a fixed interest each year, but also Is the "Ming shares real debt."
According to his understanding, at present in addition to China Steel Group Corporation (hereinafter referred to in the steel) debt restructuring agreement is actually implemented, the remaining iron and steel enterprises debt to remain in the agreement stage. And Ming shares of real debt, it is the current debt restructuring can not really fall the root causes.
Unable to land debt
China Steel, Wuhan Iron and Steel, TISCO, Maanshan Iron and Steel, Anyang Iron and Steel, Jiugang, Nanjing Iron and Steel, steel and other nine state-owned iron and steel enterprises in the end of last year to the beginning of the year with the relevant banks signed a debt-equity swap agreement, Agreement of the Mountain Steel Group, 10 steel group signed the total amount of debt - equity swap agreement of about 200 billion yuan.
China Steel is the first round of the central bank market debt to convert the first case, but also the real implementation of the only case. December 9, 2016, Bank of China, Bank of Communications, the State Development Bank and other six banks and China Steel Group formally signed a debt restructuring framework agreement, the total principal and interest of Sinosteel more than 600 billion yuan of the overall reorganization of debt, divided into debt And convertible bonds in two parts, more than 300 billion yuan of debt, to stop interest rates, interest rates and other policies, another 300 billion yuan to implement zero interest debt to convert shares, a total of about 13 billion yuan interest burden.
"Sinosteel's debt-to-equity swap is driven by the state, while other companies can not enjoy the same debt-to-equity concessions with China Steel, the current debt-to-equity swap is still a one-way approach." Chen Yuqian said.
According to Chen Yuqian introduction, most of the iron and steel enterprises debt swap agreement, the debt to equity interest after the interest rate is generally about 5.2%. In the past, the bank's loan interest is deducted from the cost of the enterprise, but after the debt-to-equity swap, it will require the enterprise to pay part of the equity interest after tax. Such debt-to-equity swap only reduces the debt ratio of the enterprise Improve the financial costs of enterprises. At present, the interest rates of large state-owned enterprises are mostly below 5%. Therefore, although some steel enterprises have signed the debt-to-equity swap agreement, the actual implementation of the debt-to-equity swap is very small. Chen Yuqian that only those average lending rate of 6% -7% of the enterprises, it may be interested in such debt swap.
In the context of the supply side reform, in February 2016, the State Council promulgated the Opinions on Deconstructing the Capacity of the Iron and Steel Industry to Resolve the Surplus Capacity, and opened the iron and steel industry to produce the curtain. The paper puts forward that "the use of market means to properly dispose of corporate debt " September 22, 2016, the State Council issued "on the positive and steady reduction of corporate leverage," a clear "orderly market-oriented bank debt to equity."
December 1, 2016, the China Banking Regulatory Commission, the National Development and Reform Commission, Ministry of Industry jointly issued "on the iron and steel industry to resolve the excess capacity of financial claims and debt issues a number of opinions", "support financial asset management companies, local asset management companies, banks and other types The implementation of the institutions of iron and steel enterprises to carry out market-oriented debt-to-equity swap, but the document does not mention the specific operation of the market debt conversion, for the possible emergence of the stock, whether tax or tax cuts, as well as interest standards , Are not mentioned.
"At present, the banks that have signed the debt-to-equity swap agreement must implement the debt-to-equity swap through their subordinate implementing agencies, namely banks' asset management companies, which are raised through marketization. Interest costs. "Chen Yuqian said that in his view, if only from the market point of view, so that steel enterprises and banks signed debt-equity swap agreement, there is no specific policy guidance, Ming shares of the current contradictions difficult to solve.
Heavy burden
The Shanxi Steel Group, which has just signed the Debt-to-Equity Swap Agreement, was established in March 2008 with a registered capital of RMB 10 billion. It is a state-owned property right unit of Jinan Iron & Steel Group Co., Ltd., Laiwu Iron & Steel Group Co., Ltd. and Shandong Metallurgical Industry Corporation The controlling shareholder of Shandong Province SASAC, holding 70% stake in Mountain Steel Group, Shandong Province Social Security Fund Council holds another 30% stake.
Since its inception, the operation of the Mountain Steel Group has been worrying. Mountain Steel Group reported that since 2008, nine fiscal years, only in 2009 and 2010 received a low profit, its parent company's net profit of 430 million yuan and 440 million yuan. The remaining seven years are losses, the total loss has more than 19.3 billion yuan. 2012 - 2016 years of five years, the average annual loss of more than 3.8 billion, of which 2016 loss of 4.47 billion yuan.
As of the first quarter of 2017, the Shanxi Steel Group continued to maintain a loss of loss of 540 million yuan, the results show that its short-term borrowing balance of 34.7 billion yuan, accounts payable balance of 15.56 billion yuan, current liabilities accounted for 57.8% of total liabilities. Current liabilities higher than the current assets of about 12.7 billion yuan, of which 6.47 billion yuan of debt due within one year.
As of the end of March 2017, the Group's assets totaled 260.28 billion yuan, total liabilities of 2210.1 billion yuan, asset-liability ratio as high as 84.9%. China Iron and Steel Industry Association released data show that in 2016 its member iron and steel enterprises asset-liability ratio was 69.6%, higher than the same period above the scale of industrial enterprises, the average asset-liability ratio of 13.8% higher than the same period foreign iron and steel enterprises debt ratio is also 10% 20%, the steel industry authorities and associations have been calling on companies to reduce debt rates.
Shanxi Steel Group's asset-liability ratio has far exceeded the industry average, its profitability and lower than the industry average, from January to March this year, China Steel Association members of iron and steel enterprises, the total profit of 23.284 billion yuan, 19% of the enterprises Loss, mountain steel in which. In the case of such difficulties, the Shanxi Steel Group is also carrying out the construction of the main production base of Jinan Iron and Steel to the sunshine of the huge project - the construction of Rizhao Iron and Steel boutique base, the project started construction in 2015, is expected to total investment of more than 46 billion RMB.
In addition to Sinosteel and Wuhan Iron and Steel is a central enterprise, the other has signed a debt-equity swap agreement with the steel group has a similar characteristics - provincial state-owned large enterprise groups, high debt ratio, the overall profit situation is not optimistic.
China Steel Industry Association Secretary-General Liu Zhenjiang has publicly stated that high leverage will cause enterprises to rely heavily on bank credit funds, and affect the enterprise's investment in science and technology and transformation and upgrading capacity, "high leverage" to make some enterprises at a high risk, Collapse, the resulting loss and social impact is great.
September 2016, the State Council issued the "on the market-oriented bank debt to equity guidance" stressed that "to encourage the development of good prospects but the temporary difficulties of high-quality enterprises to carry out market-oriented debt to convert." But how to divide the "development prospects" into financial institutions and banks. Steel companies want to rely on debt to reduce the burden of debt, and banks from their own interests, the pursuit of stable income, the game seems difficult to coordinate.
April 28 this year, China Iron and Steel Industry Association in Anhui Ma On Shan held a typical iron and steel enterprises "to leverage" exchange forum. Zhang Jinsong, deputy director of the China Banking Regulatory Commission, attended the meeting and delivered speeches. Meeting to determine the China Steel Association and the CBRC will work together to participate in the 10 typical iron and steel enterprises as the representative of this year's trial iron and steel enterprises to "leverage" specific measures. According to the new financial reporter learned that the meeting selected ten typical enterprises and the debt has been signed by the enterprise agreement part of the agreement, has not really landed steel enterprises to convert or will see the outcome this year.