A mere 4.17 million yuan in unpaid construction fees has once again thrust the former "real estate king of Beijing's outskirts," China Fortune Land Development (CFLD), into the spotlight.
On November 16, CFLD announced that creditor Longcheng Construction had applied to the Langfang Intermediate Court for corporate restructuring and the initiation of pre-restructuring procedures. The court has now accepted the pre-restructuring application.
According to disclosed data, as of October, CFLD's total overdue debt stood at 24.569 billion yuan.
Amid mounting debt pressure, CFLD's financial performance continues to deteriorate. In the first three quarters of this year, revenue plummeted 72.09% year-on-year to 3.882 billion yuan, while net losses attributable to shareholders widened over threefold to 9.829 billion yuan.
This crisis has also refocused attention on CFLD's "capital alliance" with Ping An Insurance. Once viewed as a strategic partner, CFLD has now become a heavy burden for Ping An.
Tianyancha records show that CFLD founder Wang Wenxue remains the company's de facto controller. However, his fortunes have dramatically reversed in recent years. In 2016, Wang topped Hebei's rich list with a 48.5 billion yuan fortune but has since fallen off the Hurun Rich List entirely.
**Restructuring Application Over 4.17 Million Yuan Debt** Longcheng Construction filed for restructuring, citing CFLD's failure to repay 4.1716 million yuan in construction fees despite repeated demands. The Langfang court has appointed a provisional administrator for the pre-restructuring phase.
CFLD emphasized that pre-restructuring acceptance doesn't guarantee formal restructuring approval. Risks remain that agreements signed during this phase could be terminated or deemed invalid.
Per Shanghai Stock Exchange rules, if restructuring proceeds, CFLD's stock will face delisting risk warnings. Even if approved, bankruptcy liquidation remains possible should restructuring fail.
Notably, Ping An-affiliated director Wang Wei recently opposed two CFLD board proposals, criticizing "imprudent bad debt handling" and urging improved asset impairment testing methods.
**From Strategic Partner to Heavy Burden** Ping An initially invested 13.77 billion yuan in 2018 for a 19.7% CFLD stake, later increasing its holding to 25.25%. However, when CFLD's parent company faced forced share liquidations in 2021, Ping An unexpectedly became the largest shareholder—just as CFLD's debt crisis deepened.
Ping An's 2021 annual report showed 43.2 billion yuan in impairment losses related to CFLD investments, including 15.9 billion yuan in equity and 27.3 billion yuan in credit. This wiped out 24.3 billion yuan from Ping An's net profits.
By 2024, Ping An's total exposure to CFLD reached approximately 54 billion yuan, with 43.2 billion yuan already written off. CFLD's current share price of 3.44 yuan represents a steep decline from Ping An's original acquisition price exceeding 23 yuan per share.
**The Rise and Fall of a Real Estate Tycoon** Wang Wenxue, a former truck driver with only vocational education, built his empire starting with a hotpot restaurant in 1992 that doubled as a networking hub. His breakthrough came during China's 1998 housing reform when he developed "Huaxia Garden," CFLD's first real estate project.
The company pioneered industrial park developments, notably in Hebei's Gu'an County. By 2016, CFLD's sales exceeded 120 billion yuan, ranking seventh among Chinese developers. Wang's wealth peaked at 48.5 billion yuan that year, earning him Hebei's richest title.
However, 2017's purchase restrictions in Beijing's outskirts devastated CFLD's core market. Wang later admitted strategic missteps, including overconcentration in the region, which ultimately impaired over 100 billion yuan in receivables and inventory value.
**Financial Freefall** CFLD's Q3 revenue crashed 87.76% year-on-year to 979 million yuan, with quarterly losses hitting 3.002 billion yuan. Total debt reached 264.739 billion yuan by September, with a 96.44% liability ratio.
The company prioritizes housing delivery, having completed all residential projects since 2020 except four apartment complexes. Through debt restructuring, CFLD has resolved about 192.669 billion yuan of its 219.2 billion yuan financial debt plan, with 20.203 billion yuan in interest and penalties waived.
Asset-for-equity swaps include the "Happiness Selection Platform," where creditors received 43% equity against 17.454 billion yuan debt. As of October, overdue debts totaled 24.569 billion yuan, with new litigation claims adding 438 million yuan in potential liabilities.
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