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country garden used its real estate to pay off debts owed to suppliers.

on the evening of september 9, deeo home furnishing issued an announcement stating that its wholly-owned subsidiary oushennuo signed an agreement with relevant parties of country garden to acquire three real estate properties held by the latter as payment for its 423 million yuan debt claim against country garden.

deeo home furnishing said that after this transaction, the company will continue to negotiate with country garden holdings group to deal with the remaining outstanding purchase payments.

in the opinion of industry insiders, country garden owes a considerable amount of debt to its suppliers, and the "worker-redeemed housing" that deeo home furnishing has obtained this time may be a reference for other suppliers.

debt repayment of 423 million yuan

recently, oushennuo, a wholly-owned subsidiary of deeo home furnishing, signed a "debt relief agreement" with country garden real estate group and birong investment.

according to the agreement, oushennuo will acquire the three real estate properties held by bipu real estate by transferring 100% of the equity and debt of bipu real estate held by birong investment.

the total transaction price is 423 million yuan: of which the equity transfer payment to be paid by oushennuo is 157 million yuan, and the debt transfer payment to be paid is 266 million yuan. oushennuo paid the transaction price with the 423 million yuan debt rights it enjoyed from the sale of goods to country garden holdings group's subsidiaries and affiliated companies.

the above transaction price will be used to offset oushennuo's accounts receivable of rmb 423 million, and the counterparty will use non-cash assets to offset the company's debts.

in addition, oushennuo agreed to waive rmb 57.1187 million of purchase debts owed by country garden holdings' subsidiaries and affiliated companies to oushennuo.

it is reported that the debt-collateralized assets are three real estate properties held by country garden holdings' subsidiary bipu real estate, located at no. 10/6 hill, block 10, nanxiang town, shanghai, no. 45, yun'an south road, jiading district, and no. 26, lane 29, yun'an south road, jiading district.

the result of "active coordination, repeated communication, and prudent decision-making"

deeo home furnishing said that the company's cooperation with some real estate clients has also seen a slowdown in the collection of some accounts receivable and a lack of capital recovery, and it faces a greater risk of collection.

in order to reduce the uncertainty risk of business collection and lower the risk of bad debt loss of accounts receivable, the company proactively communicates and coordinates with engineering customers to actively carry out the collection and repayment of accounts receivable, and tries to obtain suitable assets to repay debts across the country as much as possible.

deeo home furnishing said that the preliminary debt settlement arrangement currently reached between the company and country garden was the result of active coordination, repeated communication and prudent decision-making among all departments of the company and multiple external parties.

the company's acceptance of the debtor's non-cash asset settlement method can reduce the risk of bad debt losses on accounts receivable, improve the company's financial condition, and have a relatively positive impact on the company's current and future financial condition and operating results.

after the completion of this transaction, the company will continue to negotiate with country garden holdings group to deal with the remaining outstanding purchase payments to protect the company's legitimate rights and interests to the greatest extent possible.

regarding the postponement of the disclosure of the news, the company explained that country garden real estate group is facing debt repayment demands from many stakeholders such as suppliers and construction parties. the company intends to postpone the disclosure to prevent third parties from obtaining debt repayment assets through unfair competition, and at the same time to prevent other creditors from mortgaging and sealing up related assets before the company realizes debt repayment.

several suppliers have mentioned "working in exchange for housing"

due to multiple delays in the release of financial reports, country garden’s latest financial data only ends in june 2023.

as of the end of june 2023, country garden had cash and cash equivalents of rmb 101.15 billion and total liabilities of rmb 1,364.16 billion.

after the risks of country garden were exposed, its related suppliers also attracted market attention, and several of them mentioned "work in exchange for housing".

at that time, mona lisa said that since some real estate companies had liquidity problems, the company had established a special team to strengthen risk control over engineering business, proactively reduced orders for some real estate projects with higher risks, and had made individual provisions for bad debts in accordance with relevant accounting standards. at the same time, it had actively adopted measures such as work-for-residence and legal means to recover the funds. for details, please refer to the company's announcement.

huida sanitary ware stated that as of september 30, 2023, the company conducted a recoverability analysis and assessment on country garden's accounts receivable, comprehensively considering the customer's operating conditions, credit rating, defaults of bonds and bills, work-for-housing conditions, and the degree of overdue payments of the company. taking into account reasonable and well-founded information such as past events, current conditions, and forecasts for future economic conditions, the company has set aside a single credit impairment loss of 208 million yuan for this customer.