Guxiandao Takeover Zongheng Temporarily
[2008-12-23 17:04:00]
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Guxiandao Takeover Zongheng Temporarily
Half a month after Zongheng Holding Group had problems in operation, the production and sales of the company is still normal now, according to the reporter back from the plants of Zongheng recently. Compared with Hualian Sunshine and Janglong Holding, the other two companies involving financial crisis earlier in Shaoxing, Zongheng’s situation is better, which is mainly due to the temporary takeover by Guxiandao, the other large polyester company in Shaoxing, Zhejiang Province. In order to prevent the unemployment resulted from the shutdown of the plants and trouble caused by debt collection of creditors, the local government negotiated with Guxiandao. Guxiandao signed agreement to take over Zongheng Holding Group for two months. The company is committed to the contract and agreed to deliver goods on time. Guxiandao's takeover is like lease. Guxiandao will pay some rent symbolically and then get the sales income of Zongheng duering the two months. The cost of production will be deducted from the existing account of Zongheng. The production now is only processing with customers' materials. It should be said that Guxiandao can make some profit from the takeover. Who will reconsolidate Zongheng Holding? The executive of Guxiandao did not directly answer the question, but said "Zongheng is in a big mess and has a lot of liabilities. In the present economic situation, who would come up with a large amount of money to save it?! Though we two companies locate near, there is no business dealings. Zongheng is textile fiber producer, but we do industrial fiber.” The reconsolidation of Zongheng Holding Group is originally planned to complete in two months, but it seems the time is not enough according to current progress. The local government is negotiating with Guxiandao to extend the time of the takeover to half a year. The business scopes of Zongheng cover iron and steel, real estate, electricity and financial and the capital of every business involving billions of RMB, so it is impossible for one company to "eat" Zongheng Holding Group. Several plans for hr the consolidation has been studied out and there are three or four target companies. Zongheng Holding's assets are not all "bad". Last year, the company bought primary shares of many commercial banks that is profitable capital business at that time, but the economic environment changed substantially this year, all the capital was frozen now. However, once the economic situation turns for the better, these assets will have a considerable income. In fact, Zongheng has been operating with liabilities for a long time. The 'short-term loan and long-term-investment' increased its financial cost. When the economic situation is in good time, the problem can be obscured. And when one problem outbreaks, it is easy to form the 'domino effect', which eventually led to the collapse of the entire enterprise. |
Source: 中国棉纺织信息网
Keywords:Nylon; Fabric; Cotton
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