Hougu Coffee step Mai Tai is in crisis, called debt 2 billion, calls on banks to reduce pressure.

Bank loans and liabilities totaled 2 billion yuan. " After more than a month of self-struggle, Xiong Xiangren finally plucked up his courage and shook out the burden on his heart and enterprise. The founder of Hougu Coffee, China's largest instant coffee producer, did not disguise the debt crisis faced by the company's high debt.

Yesterday (February 9) afternoon, Hougu Coffee held a press conference in Kunming to disclose the company's liabilities and called on banks to reduce stress and "extend the term of the loan" accordingly.

In addition to the bank tightening credit, Xiong Xiangren also admitted the problems brought about by the rapid expansion of the company's development. "We have done too much in the agricultural base and transferred more than 100,000 mu of forest rights in a few years, but it cannot create value and create a burden in a short period of time."

In fact, the situation of Hougu is not alone in Yunnan coffee industry. Yang Zhiqi, chairman of Yunnan Lingfeng Coffee, also told reporters yesterday that the company's main assets are more than 200,000 mu of coffee plantations, but in fact it cannot obtain loans from banks through forest rights mortgages, and its total debt is also nearly 500 million yuan. the pressure on enterprises brought by banks' reluctance to lend is not small.

Total liabilities 2 billion

A total of 2 billion yuan, Hougu Coffee's total debt, can not help but let the outside world feel a little surprised.

"70% of the time is spent thinking about how to borrow money to repay loans and cash flow." Xiong Xiangren said, "as long as (the bank) extends the loan to us," private enterprises like Hougu can get out of the financial crisis they face next.

Since the second half of 2014, banks have tightened credit, cherished loans and suppressed loans, which have made the financial situation of enterprises a little tighter. Companies need to borrow money to turn around and repay loans. To this end, they have also tried to use some private funds to repay loans. However, short-term loans from private funds also lead to high costs, which is not a long-term solution.

According to a written introduction given at the press conference yesterday, the sales revenue of Hougu coffee enterprises was 1.1 billion yuan in 2013 and 1.5 billion yuan in 2014. However, although the enterprise has strong profitability and good sustainable development, in the past two or three years, due to the unreasonable debt structure, the cost of borrowing money to turn around and repay the loan is as high as hundreds of millions of yuan.

Back in 2012, Hougu Coffee had a dispute between founder Xiong Xiangren and the PE team. In addition to the entanglement between the two sides, the company's debt situation has also attracted a lot of attention. Subsequently, the dispute was finally resolved by the withdrawal of PE investors, but Hougu Coffee also had to pay hundreds of millions of yuan of PE equity transfer price.

The aforementioned introduction also said that after the withdrawal of investors, Hougu Coffee, which was short of funds, wanted to raise funds to maintain the survival of the enterprise, but also to pay investors' equity transfer price, and corporate loans continued to expand.

"facing the debt crisis directly, we will no longer use private lending to turn around and talk to the banks." Xiong Xiangren said that although the enterprise is still normal in operation and has not really encountered a debt crisis, it needs to find a solution and solve the problem as soon as possible, and he called on banks to reduce pressure.

"the debt ratio is over 50%." Xiong Xiangren said that at present, Hougu Coffee has a total asset of 3.9 billion yuan.

For Hougu Coffee, which he founded, it has once again reached a turning point. From the beginning to supply raw materials to international giants such as Nestl é and Starbucks, to no longer supply raw materials and changed to independent production, Hougu has become the largest coffee company in China.

The rapid expansion of the valley has been accompanied by a growing snowball of debt, which is now a big burden.

Continue to launch new projects

In recent years, Hougu has also launched new production expansion projects. Since 2008, 3000 tons and 10, 000 tons of instant coffee production lines have been built and put into production. The latter was put into production at the end of 2010, making Hougu Coffee the second largest instant coffee manufacturer in Asia. At the end of January 2015, the foundation of the 20,000-ton Hougu coffee production line was announced and is expected to be completed and put into production by the end of 2016.

Is the rapid expansion of production line projects leading to a sharp increase in corporate debt? What is the capacity and digestibility of Hougu coffee?

Xiong Xiangren said in an interview with reporters that the company's existing production capacity has been basically digested and needs to be met by new projects. He also admitted that in the past, enterprises "took a big step forward." He attributed it mainly to the heavy investment in the planting base. Because in recent years, Hougu has been building a coffee planting base, which has invested a lot.

"We have done too much in agricultural bases, and more than 100,000 mu of forest rights have been transferred in a few years, but we cannot create value in a short period of time, creating a burden. After making so many bases, we should act according to our capacity and should not transfer too much. As a result, it is difficult to support the profits of industrial sales invested in agriculture." Xiong Xiangren concluded.

The investment in coffee plantations is huge, and in fact, such assets are difficult to obtain loans from banks and become a financial burden for enterprises.

Lingfeng Coffee is another major coffee company in Yunnan. Yang Zhiqi, chairman of the company, also admitted that his financial situation was tight because of the massive development of the planting base. "for our large coffee growers, the asset is mainly the forest right of the coffee garden. We want to use the forest right as a mortgage, but the bank does not recognize it. We hope that the bank can attach importance to the loan of physical enterprises." Yang Zhiqi told reporters that the company currently has a coffee plantation covering an area of 230000 mu. Yang Zhiqi said that because there are basically no medium-and long-term loans from banks, mainly one-year liquid loans, the company is actually more difficult than Hougu, and he also called on "banks and the government to pay more attention to it."