On April 26, Zhongtian Finance (000540) announced that its creditor, Ping An Bank Huizhou Branch, applied to Guiyang Intermediate People's Court for reorganization. Reorganization is a protective measure rather than bankruptcy liquidation.

The announcement shows that the Notification Letter sent by Huizhou Branch of Ping An Bank Co., Ltd.: As a creditor of Zhongtian Finance, Huizhou Branch of Ping An Bank, in view of the fact that Zhongtian Finance is unable to pay off its loans when they are due, but as a listed company, Zhongtian Finance has the potential of rebirth value and rescue, citing that Zhongtian Finance is unable to pay off its debts when they are due and obviously lacks liquidity, Apply to Guiyang Intermediate People's Court (hereinafter referred to as "Guiyang Intermediate People's Court") for restructuring Zhongtian Finance. Reorganization is an effective way to resolve risks in a market-oriented and legalized way. There have been a large number of successful cases in the market. Zhongtian Finance should actively support and cooperate with relevant work, and all parties should work together to promote as soon as possible, so as to not only resolve the debt risks of Zhongtian Finance, but also protect the legitimate rights and interests of all creditors, including Ping An Bank Huizhou Branch.

According to the analysis of professionals, the underlying logic of reorganization is still the rebirth value, which is the positive superposition of creditors' and debtors' expectations of future development value, and can be regarded as an effective means to promote multi win. At present, restructuring has become an important path for listed enterprises to get rid of operating difficulties and realize normal operation.

It is understood that under the current circumstances, restructuring may be the best choice for Zhongtian Finance in various difficulties and the best opportunity for its "nirvana rebirth". In the past three years, the number of listed companies applying for/being applied for reorganization has shown a significant growth trend. Restructuring has been regarded by the industry as an important embodiment of the structural reform of the supply side of capital market services, which will help to better play the role of capital market resource allocation.

So far, more than 100 listed companies have successfully extricated themselves from difficulties and achieved rebirth through reorganization procedures under the guidance of market-oriented and legalized principles. In accordance with the practice, the restructuring will carry out a comprehensive restructuring of enterprises in terms of debt, assets, business, equity, management, etc., aiming at the causes of enterprise crisis, "accurately dismantle bombs", and propose solutions to eliminate the old diseases, improve corporate governance, and resolve their debt burden.

According to the analysis of professionals, if Zhongtian Finance successfully implements the reorganization and completes the reorganization plan, it will be conducive to optimizing its own asset liability structure, improving the sustainable operation and profitability of the enterprise, and will inevitably produce multiple positive effects.

Deeply optimize the structure of assets and liabilities

Protecting the interests of creditors

The existing high debt may be rolled over, thus greatly easing the short-term debt repayment pressure of Zhongtian Finance. At the same time, it means that Zhongtian Finance will change from the original one-on-one negotiation with a single creditor on debt resolution, to multi party consultation with all creditors and investors, to exchange time for space, to solve the debt problem of Zhongtian Finance in a package, and will maximize the protection of the interests of all parties.

Significant improvement in cash flow

Push back to the track of healthy development

Zhongtian Finance can introduce investors through restructuring, optimize its asset liability structure, maximize the normal operation of enterprises, repair credit, and effectively improve fundamentals, which can lay the foundation for sustainable operation, and promote enterprises to grow back into high-quality and healthy listed companies.

Effectively lift fundamentals

Promote high-quality development

Zhongtian Finance mainly has two licensed financial institutions, Zhongtian Guofu Securities and Zhongrong Life. After the completion of restructuring, high-quality assets can be continuously integrated through refinancing, asset purchase and other ways to further improve the asset adequacy of China Financial Life and Guofu Securities. We will improve the ability of financial institutions to serve the real economy and forge a high-quality and sustainable development path.

Source: 21st Century Economic Report

Edited by Miao Guoqiang

Second instance Meng Jianfei

Third instance Zhao Xiaoya