Association of financial creditors have sought to punish tianwei and soldiers loading group

Polaris solar PV net news: May 20, the group released “11 tianwei MTN1” resolutions of the owners meeting, the announcement follows:

1, determine and authorize the trustee Bank artificially making attorneys Dacheng.

2, for Group 11 tianwei MTN2 accelerated expiration.

3, the requirement for additional group parent company of soldiers loaded group “11 tianwei MTN2” unconditional guarantee.

4, tianwei group and related parties to take civil action.

5, tianwei group “11 tianwei MTN2” event to draw attention to the interbank market dealers Association (hereinafter “dealer’s Association”) makes the following three areas of action.

(1) drew attention to the Traders Association of tianwei group denounced the breach.

(2) drew attention to the Traders Association of soldiers loaded group and its subsidiaries, within the duration of the debt financing risk ToolTip; suspended soldiers loaded group and its subsidiaries released all debt financing instruments.

(3) the attention of Dealers Association will be the default behaviour of tianwei group feedback from other regulators, including, but not limited to the development and Reform Commission, SASAC, the CBRC and csrc.

6, asked the group to “11 tianwei MTN2” bondholders June 2013 in public between February 2014 and relevant documentation.

Tianwei group is defeated and new energy company soldiers wear group Dim exit

Tianwei group needs to pay its massive debts each year, and can also take advantage of the new servicing old debts in the past managed to maintain. In early April, 2014, was published, the Group solvency, which might be its parent company lost the patience to survive and thus did not provide timely help, leaving the Group bond defaults.

Since becoming China’s first public bond defaults by State-owned enterprises, and Baoding tianwei Group (hereinafter the Group) recently brought to the forefront.

On April 21, 2015 is the group for “11 tianwei MTN2” interest payment day, creditors received on this day is “notice fails to pay interest.” Tianwei votes in event of default address is not yet settled, lead underwriters of CCB will bring together holders held a meeting on May 13, consultations on related issues.

Tianwei group is ultimately financed debt, bankruptcy still remains to be seen. No matter what kind of situation, the Group has become to break the bond public offering rigidity to honour the first State-owned enterprise.

Tianwei group is trimming the China ordnance equipment Group Corporation (hereinafter referred to as soldiers loaded group), a wholly-owned subsidiary, in 2011, followed by two periods totalling 2.5 billion dollar medium-term note (MTN), again in 2012 and 2013 issued 2 billion yuan fund-raising tool (PPN), when its credit rating to AA +. But starting in 2011, the Group net profit losses and losses expanded in 2014, loss of 10.1 billion dollars, 8.3 billion yuan of which is caused by an assets impairment losses, there are 1.1 billion yuan to pay interest, by comparison, caused by operating losses is not that much.

Tianwei group in late 2014 was 12.9 billion yuan in total assets, total liabilities of approximately 20.9 billion yuan. April 21 to pay debt interest of 85.5 million Yuan, the amount is not high, but for the debt-laden group, which to a bale of straw that broke the camel.

This tianwei ticket has a certain chance of default. However, from the company’s financial situation, the default is also necessary. Perhaps the PV industry overcapacity crisis, who eventually emerged in a specific company.

In the context of credit easing, the State encourages the PV industry, the Group substantially in domestic and foreign investment and set up factories, but due to serious oversupply of PV products, Europe and “double reverse” (anti-dumping, anti-subsidy) to investigate the influence, as well as their own imprudent investment decisions, eventually led it to Zag, substantial investment will not withdraw, leaving behind enormous debt deficit. Tianwei group has thus become the second after the aluminum Corporation of China, China Eastern Airlines and China Ocean shipping, and breaking tens of billions of losses of State-owned enterprises.

Tianwei group needs to pay its massive debts each year, and can also take advantage of the new servicing old debts in the past managed to maintain. In early April, 2014, was published, the Group solvency, which might be its parent company lost the patience to survive and thus did not provide timely help, leaving the Group bond defaults.

From the perspective of risk education, many people in the industry believe that tianwei votes cannot claim interest, break the rigidity of the bond payment practices, prompting investors to form ideas that match the returns and risk, is conducive to the long-term development of the bond market.

Defaults to be expected

In Baoding City of Hebei province, tianwei group and local people as famous for eating donkey meat. Three for “tianwei” named roads (tianwei Dong Lu, Wei Zhong Lu, tianwei West Road) traversed the city, locals take pride in working in tianwei group.

Tianwei group formerly known as the Baoding transformer plant, founded in 1958, is a leader in the field of power transmission and transformation equipment businesses. In 2002, listed after the group involved in the emerging alternative energy industry, a stake in local private PV enterprises in Baoding, but control later passed.

In early 2008, the Group officially became the Central loading group, a wholly owned subsidiary. Backed by central enterprises, the group in the new layout of the Sturm und drang in the energy sector, but this time domestic renewable energy industry has shown its suffering. In the eyes of peers, the group is defeated and a new energy because “no step on time”, just like in the stock the highest point admission, who eventually became the buying Consortium.

As far back as two years ago, soldiers loaded group has decided to group all day.

In September 2013, the military installed Group Finance Director Deng Tengjiang served as President of tianwei group. For this debt, funding pressures for companies, with more than 10 years work experience in financial audit Department of Deng Tengjiang, is very suitable for the job.

Deng Tengjiang, who was 57, was nearing retirement, running the Group’s main mission is to help companies gradually lose the new burden on the energy industry. Now, the main idea is to group holdings public company–tianwei baobian to “tianwei” divestiture to tianwei’s new energy business, the group, through such measures as closed private placement, will be gradually into a group of soldiers loaded major shareholders of listed companies.

Through a series of capital operation and substantial loss of new energy industry focus group, baiyiji debt to wait progressively digested. Prior to this, the company appears more than overdue situation, it was a coupon is default set for a long time.

Judging from the correlation, photovoltaic power generation and transmission and there is some correlation, early investments in new energy industries are tianwei baobian, on behalf of, namely transmission and new energy in tianwei, a pot to cook. New energy sector losses, tianwei baobian hurt the listed companies, the company continued to reduce, offset paper losses eventually face the risk of delisting from the Shanghai Stock Exchange.

Deng Tengjiang had said at the end of 2013, the analysis of a business meeting, tianwei baobian operating conditions is a result of new energy industry write-downs and losses, both industries are intertwined to tianwei baobian has brought a heavy burden, it must be cleaned up as soon as possible to ensure transmission and distribution industry Trave can truly return to industry.

By 2014, tianwei group has repeatedly requested the military installed group finance company mortgage to repay its debts, mortgage is that it holds stakes in listed companies. The end of 2014, tianwei baobian (*ST tianwei) Xiang Bing loaded closed issue 160 million shares of the group, soldiers loaded group tianwei baobian stake reached 33.47%, become the largest shareholder.

The move’s intention is very clear, that is diluting the original majority shareholder group’s stake so that it can no longer distribute funds of listed companies from “blood transfusion”, then keep the shell of a listed company.

On March 17, 2015, tianwei baobian delisting risk warning issued a revocation notice 2014 fiscal year revenues to 3.895 billion dollars belong to shareholders of listed companies ‘ net profits reached 67.7 million Yuan, *ST tianwei announces successful pick hat. Pick hat was removed after “Tian Wei” Word, changed its name to become electric, means cutting is obvious.

Transformer is mainly engaged in production and sales of tianwei baobian was the Group’s core assets, Telefónica has been loaded completely split of the group, the rest is “preside” group. Tianwei tebian electric company employee to reporters April 22, stressed that his company belonging to the same electric, rather than the group.

Keep listed company’s shell is certainly welcome, but such joy in tianwei group, it means not the same taste.

After four days (April 21, 2015), tianwei group 2011-II medium-term notes (11 tianwei MTN2) fails to honour 85.5 million yuan of interest. Soldiers loaded group and bond lead underwriters of CCB has not shot as is widely expected to come to his rescue, and eventually became the first State-owned enterprise in the public bond market default cases.

The direct trigger of default triggered are Baoding branch of ABC in the case without the knowledge of the company, the draw of funds in its bank account, resulting in capital chain rupture of tianwei group.

Tianwei group and Warburg Trust Co Ltd of the trust loan contract was signed on March 27, 2013, by three subsidiaries 100% pledge, financing of 260 million Yuan. Before the credit expires on March 25, 2015, the huabao trust to transfer the whole debt to the agricultural Bank of China, Hebei branch, agricultural Bank of China branch in Baoding City, Hebei branch of the designated exercise creditor rights, draw the Group funds in bank accounts. The next morning, the Group received from the creditor and the creditor notifications of changes.

Prior to this, Exim Bank, CITIC Bank, Bank of China and other financial institutions seeking access to justice, the recovery of overdue loans. Debt-crisis group, starting from the third quarter of 2014 it is insolvent, and equity assets have also been frozen by creditors, the unconventional collection of ABC, tianwei group debt hole early exposure and become tianwei default trigger.

Public financial audit reports as of December 31, 2014, the Group lost a cumulative $ 10.271 billion trillion yuan, with a net worth-8.035 billion yuan have been insolvent. So, old solar star step by step how the debt spiral?

“Players” group of soldiers loaded

Tianwei Group Chairman Deng Tengjiang’s predecessor, Dong Qihong, Zhou Jian, the Group insider said, two people worked for a short time, and not very impressive. Have far-reaching impact on the group is more recently served as President and General Manager Ding Qiang, at present he served as soldiers loaded the Group Assistant General Manager.

China transformer industry in “85” end gradually fragmented, was ranked the top three is the Shenyang transformer plant, Xian transformer factory, transformer factory in Baoding, Baoding transformer plant later developed rapidly as a leader in domestic transformer manufacturers.

Has been working in this factory, Ding Qiang, in 1999 as the Baoding tianwei baobian electric Chairman and Party Secretary, and two years later, the company listed on the Shanghai Stock Exchange, namely, tianwei baobian just pick hat.

After the listing, tianwei baobian flush with cash. In 2002, Ding Qiang decided to buy into a PV enterprises–in Baoding Yingli new energy resources limited, tianwei baobian capital 44.75 million Yuan, accounting for 49% a share, becoming the company’s largest shareholder, Yingli and new businesses in the Beijing science and technology consulting company 45%, 6% respectively.

Since 2004, an unprecedented international and domestic solar heat, many companies turned to photovoltaic cell production. Yingli Green energy debt also launched the second phase of the project, but in order to obtain financing, Miao Liansheng transferred the head of Yingli 2% shares in tianwei baobian shares reached 51%, the company name was changed to tianwei Yingli new energy company.

In June 2007, Yingli Green energy in the United States market. In order to bypass policy barriers to list State-owned shares in the United States, tianwei baobian with Yingli company reached a conditional agreement to transfer corporate control. Yingli lost control of tianwei baobian, a stake was diluted to 25.99%.

In 2008, soldiers loaded group beat the national grid from Baoding municipal SASAC bought tianwei 100% equity. Unable to gain actual control position of the British company, soldiers loaded group wants to use the company’s idea of the layout of new energy industries.

Soldiers loaded groups to start using tianwei group involved in wind power, while in the PV industry for the whole industrial chain layout.

Central SOEs has incomparable networking, policy, private enterprise financial advantage, it is “Namaste” group of soldiers loaded massive new energy investment plan can be inferred. According to the plan, soldiers mounted group in the “Eleven-Five” period invest at least 15 billion yuan (from 2007 to 2008 approved projects for a total investment of no less than 10 billion dollars), to the “Twelve-Five” at the end, invested no less than 30 billion yuan.

Photovoltaic power generation with clean, safe, convenient, efficient and so on, in the “Eleven-Five” period China is developing very quickly. Private enterprises, local State-owned enterprises, as well as a similar group of soldiers packed the Central race to compete for the photovoltaic market. Thus, overcapacity, which foreshadowed future anti-dumping investigations.

In October 2010, the State Council on speeding up the cultivation and development of emerging industries of strategic decision (guofa (2010), 32nd) to include solar energy photovoltaic industry in areas of emerging industries of strategic importance. February 2012, the Ministry released the solar PV industry “Twelve-Five” development plan, supporting backbone enterprises good and strong and 2015 years ago offered to form a 1-year sales revenue over the multi-billion-dollar PV industry, 3-5 annual sales revenue of 50 billion yuan of PV industry; 3-4 annual sales revenue of over 1 billion yuan of photovoltaic equipment business.

Central ministries and encourage policies, local governments also use the best policy investment, the solar photovoltaic industry in the market and the Government under the dual noise, rapid expansion of production capacity.

Conveniently located in economic development zone, shuangliu County, Chengdu city, Southwest Harbor, tianwei new energy holding company, was one of the 17 subsidiaries of tianwei group, it was incorporated in July 2007, mainly engaged in wafer, cell and module production, 2010 Caijing reporters visited the company.

Tianwei new energy holding company party Secretary Zhao Xiusheng, Akbar told reporters that this project is supported by the Chengdu Municipal Government’s attention, given, shuangliu County has many investment incentives.

“That year, Chengdu city, ‘ a district business ‘ strategic thinking, shuangliu County industries dominated by new energy. “Chengdu shuangliu County April 23, 2015, one official said.

Said Zhao Xiusheng, tianwei new energy industry in China is the longest and most complete industry chain from polysilicon, silicon wafers, cells, modules and photovoltaic plants have, is one of the companies earlier into the new energy industry, companies not only have multi-crystalline silicon PV, thin film PV, wind power.

In addition to the products and raw materials, the group is up the PV, polysilicon manufacturing has already completed the layout.

Polysilicon is an essential foundation for solar cell materials, Leshan city, Sichuan province, is the country’s largest production base of silicon materials, for their raw, tianwei group layout of new energy focus on Sichuan region, has invested in Leshan city, Sichuan xinguang silicon technology limited, tianwei silicon technology limited company, xinguang Silicon is the nation’s largest polysilicon manufacturers.

In December 2007, tianwei baobian joint investment group in Sichuan province, Sichuan minjiang River irrigation hydropower company limited jointly funded, xinjin County, Sichuan province industrial park in tianwei Sichuan silicon industry co, 945 million yuan of registered capital, tianwei baobian holding 51%.

But a few years later, sharp, new energy into corporate and Government “burden”. These officials said, when the new energy emerging, which belongs to the industry, did not think European “double reverse” the impact is so great. After 2012, to optimize the industrial layout of shuangliu County, new energy industries gave way to free manufacturing, biotechnology and other industries.

In the photovoltaic field, larger Suntech solar, Yingli, Trina, has arisen now, and plead for the film generation of Chinese private enterprises, following the acquisition of tianwei group, the “players” soldier loaded group became the brightest solar star, followed by the China power investment, China National building material group Central.

Suntech, the LDK, and Baoding tianwei successive exits in disgrace, leaving the loss-making, the new energy industry it really is a one way street?

Investment failures of the war

A person familiar with the matter told reporters, tianwei new energy industries total defeat, first, because errors in invested in Silicon.

Tianwei group has invested in Leshan, Sichuan province and other places of polysilicon production enterprises, and bring a lot of revenue for the company. But after a few years, these companies have bankruptcy-in January 2014, tianwei Silicon filed for bankruptcy in December 2014, xinguang Silicon formal insolvency in April 2015, tianwei bankruptcy.

The main cause of bankruptcy, is the Silicon price rises and falls.

These people said that in 2001, when he returned to international silicon materials are cheap, about $ 30 a kilo. But after 2004, domestic and international solar energy industry booming, polysilicon prices soared, to the first half of 2008, Silicon material rose to more than 400 US dollars per kg. This is the poly-silicon “profiteering.”

Early entry into the industry’s enterprises earn full fist, which stimulated the domestic many enterprises invest in polysilicon plant.

On the establishment of a scale of polycrystalline silicon plant would cost hundreds of millions of Yuan, its costs including equipment, infrastructure investment, operation and there is a very high energy costs, it is understood that the current domestic polysilicon comprehensive energy consumption of about 140 kilowatt-hours of electricity per kilogram, previously up to 350 degrees. In addition, there are exhaust gas recycling problem. “Poly-silicon in the production of hydrogen, the silane reaction could not finish most of silane gas, must be recovered, recycled directly before the technology is not up to standard, can cause environmental problems. “These people said.

Later into the polysilicon manufacturing businesses are mostly small investment, low technical threshold. These people said, “when lucrative investment polysilicon plant, producing products of high energy consumption, but still can make money, and lucrative. But if prices return, foreign manufacturers the advantage is more obvious. ”

Since then, Silicon price all the way down. By the year 2012, per kilogram of polysilicon prices fell from its highs in 2008 when more than 400 US dollars to 17 dollars, below cost price, including tianwei Silicon material plant, and almost annihilated.

3 Silicon company to invest in Sichuan suffered heavy losses, according to 2014 the financial report shows that amounted to 1.3 billion yuan in bad loans, they borrowed from the banks the loan cannot be repaid on schedule.

Brunt is in Baoding tianwei Group investments in wind power (including host, blade manufacturing company), thin-film photovoltaic projects, which amount is much higher than polysilicon plant, a single wind turbine companies invested more than 1 billion yuan. Reporters learned that these projects have long been shut down, the specific bad debt amount has not been disclosed.

Investment United States Hoku Corporation, is another major investment of tianwei group failed. 2014 according to the company’s financial reports revealed that the project investment provision for bad debts reserve amounting to 2.7 billion dollars.

Hoku Corporation was founded in 2001, is the United States a focus on clean energy technology company, listed on NASDAQ in August 5, 2005. The company has two wholly owned subsidiaries, including Hoku materials applied to the production and sales of Solar polysilicon materials market, design capacity of 4000 tons; Hoku solar company main business is in the United States mainland and Hawaii sales and installation of solar photovoltaic systems.

In December 2009, new energy holdings, becoming Hoku’s controlling shareholder through acquisitions, owns 60.82% shares.

Because PV product prices down sharply, price and the cost of hanging upside down is serious, polysilicon projects completed and put into production will face a loss-making situation, in order to avoid further loss, 2011 Hoku polysilicon project had to be stopped at the end of construction. As market conditions deteriorated further, with the stock price plummet. In July 2012, Hoku Corporation, filed for bankruptcy.

In 2013, the National Audit Office on soldiers loaded 2012 annual financial audit of the revenues and expenditures of the group, focusing on auditing the soldiers with Group Headquarters and six companies including tianwei group, the audit found, the group without approval from the national development and Reform Commission raised without permission of Hoku’s investment plan.

The audit found that from 2008 to 2012, the Group of 21 new fixed assets investment projects in energy, there are 20 unregistered Board to consider legal proceedings involving 15.275 billion yuan in investment. Until the end of 2012, the Group has 3 Ultra plans to invest 285 million yuan of investment projects, and does not report to the competent authorities for approval; 11 without a loaded Group approval to start construction of the project, involving investment of 2.485 billion yuan.

Audit, tianwei new energy investment, debt and business risks of rapid growth in May 2013, external financing of 23.442 billion yuan, up to 1.19 billion yuan losses in 2011 and 2012, respectively, and 3.328 billion yuan.

Audit report stated that “in the implementation of national economic policies and business major in economic decision making, tianwei new energy investment decisions, such as substandard, inefficient or even serious losses, and so on. “The problems identified in the audit report, the Group proposed to strengthen the operation of the Board, development of management systems, and set the” Office of the Board of Directors “to ensure that daily work according to law, and regulate the operation of the Board.

The final blow

Tianwei new energy holding company based in Chengdu in January 2015, changed their scope of operation, in the original range, based on its own leasing, equipment leasing has increased. Corporate office phone has been in a State of no answer.

Reporters learned from the Chengdu shuangliu County party Committee propaganda Department, put the group have been prepared in accordance with the Act program, tianwei new energy holding company reorganization.

Tianwei group insiders say around 2012, Europe’s “double reverse” investigation the company was hit hard by.

Global PV module production capacity of between 50GW-60GW, only China’s capacity to reach 40GW, accounted for more than 70%. Capacity is very large, but a lack of demand, domestic PV installation is less than 10G, so the solar photovoltaic products in China mainly relies on u.s. and European markets. In 2011, for example, Chinese exports of photovoltaic products, more than 60% exports to the EU, products worth about US $ 26.5 billion.

Tianwei Group also benefited in this round of growth. In 2011, tianwei new energy plate sales revenue achieved 5.282 billion yuan, representing a substantial growth of 36.88%. Before 2011 PV products of high profits attract a lot of new capacity coming, oversupply situation is more serious.

“The photovoltaic industry in previous years capacity has been 40% or 50% more than actual demand, which is normal, but in 2010-2011, particularly in Eastern China, a number of manufacturers, small plant capacity expansion soon, a lot of people in this industry, sparking a renewed building boom. “Zhang Fengming, Nanjing University professor said.

High profits come mainly from government subsidies. In the European and American markets, Government subsidies for end markets, initially, very large government subsidies, for half the price of photovoltaic products. The Chinese market, supply side of government subsidies, in terms of production, land and other subsidies. Different subsidies can have a different effect, which led to rising consumer demand, which led to rising production and supply.

Early into companies make large profits, as capacity expansion, the distortion of competition in the market of PV products. Around 2012, the United States, the European Union anti-dumping investigations against China PV products.

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