“The Nantong LED project will continue to expand its investment, with a total investment of 14 billion, and CDB remains the most cooperative bank.â€
This is a company that seeks to expand rapidly by building a high debt wall and expanding its financial leverage. Since 2003, the debt-to-asset ratio of Tongfang (600100) has never been lower than 50%, and it has approached 70% at the end of last year.
Behind the high debt, it is a huge amount of credit transfer from banks. It is understood that including Bank of China, China Construction Bank, Bank of Communications, Bank of Beijing, Agricultural Bank, CITIC Bank, etc., are all credit support from Tongfang, and Tongfang shares have accelerated the pace of project expansion and market mergers and acquisitions.
Beginning in 2010, on the basis of continued cooperation with the above-mentioned old faces, Tongfang shares and the National Development Bank are getting closer.
This stems from a large LED project in Nantong, Jiangsu.
Nantong LED project China Development Bank radical blood transfusion
2008 is a key year for Tongfang shares. In this year's market turmoil, stock prices plunged, and the company made a strong decision to develop LED in the turmoil, and the company's debt ratio has not come down since then.
"To do LED projects, the investment in the pre-production plant and equipment is too large, and it requires continuous capital investment, and it is difficult to have a positive return in a short time," said an LED industry analyst in Shanghai.
In May 2008, Tongfang shares allotted 1.919 billion shares, of which 800 million were used for “high-brightness light-emitting diode (LED) chip manufacturing and industrial application†projects. As of the end of 2010, the accumulated investment amount was 549.12 million yuan, and the revenue generated in 2010 was generated. It is -11.63 million yuan.
On August 8, 2010, Tongfang invested in the construction of a comprehensive industrial base for high-brightness LED applications in Nantong, Jiangsu. According to reports, the total investment of the project is 6 billion yuan, and the investment in the first phase is 3 billion yuan. This is another major project of Tongfang to expand its LED production capacity after the establishment of LED chip and LCD TV LED backlight industry base in Beijing and Shenyang.
Vice President Wang Lianghai’s ambition is to “become the largest and the world’s top three chip suppliers in the next three years.â€
Where does its large amount of investment come from?
On the one hand, the company increased Jiangsu Nantong as the implementation site of the “high-brightness light-emitting diode (LED) chip manufacturing and its application industrializationâ€, and invested 172 million yuan in equipment purchases to invest in the wholly-owned subsidiary Nantong. Tongfang Semiconductor Co., Ltd. uses the method only to purchase equipment; on the other hand, the company issues bond financing of 200 million. Obviously, these funds are not enough.
The 2010 Shareholders' Meeting reviewed and approved the “Proposal on Providing Guarantee for the 2 billion Yuan LED Project Loan Amount Applied to Bank of China by Nantong Tongfang Semiconductor Co., Ltd.â€.
In the first extraordinary shareholders meeting in 2011, the “Proposal on Providing Guarantee for the 2 billion Yuan LED Project Loan Amount Applied to the National Development Bank of Nantong Tongfang Semiconductor Co., Ltd.†was reviewed and approved.
The implementation of the above credit policy is implemented by the China Development Bank Jiangsu Branch and the Bank of China Nantong Branch.
In 2010, Tongfang Co., Ltd. established a wholly-owned subsidiary “Nantong Tongfang Semiconductor Co., Ltd.†and “Nantong Tongfang Science and Technology Park Co., Ltd.†as the main body of the Nantong LED project. As of the 2012 semi-annual report, the two banks provided a total of 1.663 billion loans to the two companies. China Development Bank provides long-term loans of up to 10 years with an interest rate of 7.05%, while BOC mainly provides trade finance loans.
CDB has naturally become a “seat guest†for long-term loans of Tongfang. In its top five long-term loan rankings, CDB Jiangsu Branch accounted for the top three.
The in-depth cooperation between CDB and Tongfang shares began in 2005. On June 6, the same party and China Development Bank signed a total loan contract of 3.8 billion, including: soft loans of 450 million yuan, hard loans of 3.35 billion yuan, for water, high Aluminum fly ash production of aluminum and silicon series alloys, self-owned intellectual property technology incubation and "going out" international cooperation and other projects.
This is a company that seeks to expand rapidly by building a high debt wall and expanding its financial leverage. Since 2003, the debt-to-asset ratio of Tongfang (600100) has never been lower than 50%, and it has approached 70% at the end of last year.
Behind the high debt, it is a huge amount of credit transfer from banks. It is understood that including Bank of China, China Construction Bank, Bank of Communications, Bank of Beijing, Agricultural Bank, CITIC Bank, etc., are all credit support from Tongfang, and Tongfang shares have accelerated the pace of project expansion and market mergers and acquisitions.
Beginning in 2010, on the basis of continued cooperation with the above-mentioned old faces, Tongfang shares and the National Development Bank are getting closer.
This stems from a large LED project in Nantong, Jiangsu.
Nantong LED project China Development Bank radical blood transfusion
2008 is a key year for Tongfang shares. In this year's market turmoil, stock prices plunged, and the company made a strong decision to develop LED in the turmoil, and the company's debt ratio has not come down since then.
"To do LED projects, the investment in the pre-production plant and equipment is too large, and it requires continuous capital investment, and it is difficult to have a positive return in a short time," said an LED industry analyst in Shanghai.
In May 2008, Tongfang shares allotted 1.919 billion shares, of which 800 million were used for “high-brightness light-emitting diode (LED) chip manufacturing and industrial application†projects. As of the end of 2010, the accumulated investment amount was 549.12 million yuan, and the revenue generated in 2010 was generated. It is -11.63 million yuan.
On August 8, 2010, Tongfang invested in the construction of a comprehensive industrial base for high-brightness LED applications in Nantong, Jiangsu. According to reports, the total investment of the project is 6 billion yuan, and the investment in the first phase is 3 billion yuan. This is another major project of Tongfang to expand its LED production capacity after the establishment of LED chip and LCD TV LED backlight industry base in Beijing and Shenyang.
Vice President Wang Lianghai’s ambition is to “become the largest and the world’s top three chip suppliers in the next three years.â€
Where does its large amount of investment come from?
On the one hand, the company increased Jiangsu Nantong as the implementation site of the “high-brightness light-emitting diode (LED) chip manufacturing and its application industrializationâ€, and invested 172 million yuan in equipment purchases to invest in the wholly-owned subsidiary Nantong. Tongfang Semiconductor Co., Ltd. uses the method only to purchase equipment; on the other hand, the company issues bond financing of 200 million. Obviously, these funds are not enough.
The 2010 Shareholders' Meeting reviewed and approved the “Proposal on Providing Guarantee for the 2 billion Yuan LED Project Loan Amount Applied to Bank of China by Nantong Tongfang Semiconductor Co., Ltd.â€.
In the first extraordinary shareholders meeting in 2011, the “Proposal on Providing Guarantee for the 2 billion Yuan LED Project Loan Amount Applied to the National Development Bank of Nantong Tongfang Semiconductor Co., Ltd.†was reviewed and approved.
The implementation of the above credit policy is implemented by the China Development Bank Jiangsu Branch and the Bank of China Nantong Branch.
In 2010, Tongfang Co., Ltd. established a wholly-owned subsidiary “Nantong Tongfang Semiconductor Co., Ltd.†and “Nantong Tongfang Science and Technology Park Co., Ltd.†as the main body of the Nantong LED project. As of the 2012 semi-annual report, the two banks provided a total of 1.663 billion loans to the two companies. China Development Bank provides long-term loans of up to 10 years with an interest rate of 7.05%, while BOC mainly provides trade finance loans.
CDB has naturally become a “seat guest†for long-term loans of Tongfang. In its top five long-term loan rankings, CDB Jiangsu Branch accounted for the top three.
The in-depth cooperation between CDB and Tongfang shares began in 2005. On June 6, the same party and China Development Bank signed a total loan contract of 3.8 billion, including: soft loans of 450 million yuan, hard loans of 3.35 billion yuan, for water, high Aluminum fly ash production of aluminum and silicon series alloys, self-owned intellectual property technology incubation and "going out" international cooperation and other projects.
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