Post-Valley Coffee Debt Crisis is How to Relieve Total Debt of $2 Billion

When it comes to the bank's timely policy support for enterprises to deal with "loan for the new or the old", Xiong Xiangren's eyes are red: very moved! I did not expect that banks can support the development of enterprises so boldly and freely. For at least a year, there is no need to rack their brains to solve the "U-turn" capital problem, and enterprises no longer have to carry the high financial cost of private borrowing, and can finally embark on the track of sound development.

Xiong Xiangren said frankly that through this crisis, enterprises should also reflect on their own shortcomings and strengthen their own management so that they can really mature after the crisis. Only in this way can we truly reflect the value of the government and banks in helping enterprises solve difficulties and get out of difficulties.

Bank loans and liabilities totaled 2 billion yuan. " After more than a month of self-struggle, Xiong Xiangren, president of Yunnan Coffee Industry Association and chairman of Hougu Coffee, finally plucked up his courage and "shook" the burden on his heart and enterprise to the outside world. The founder of the country's largest instant coffee manufacturer did not disguise the debt crisis faced by the company under its high debt.

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

The total debt is 2 billion yuan

Hougu Coffee's total debt is as high as 2 billion yuan, which is a big surprise to the outside world. 80% of the time is spent on financing, dreaming about how to raise money to "turn around". " Xiong Xiangren said, "as long as banks extend loans to us, private enterprises like Hougu will be able to get out of the financial crisis they face next."

Xiong Xiangren said that since the second half of 2014, the maturity of bank loans in Yunnan Province as a whole has been shortened, and many of the previous two to three-year loans have been changed to three-month short-term loans. This makes many real enterprises, including Hougu Coffee, have to use private loans to maintain bank repayment, "ostensibly masking the debt crisis of physical enterprises getting deeper and deeper. But private lending is like wearing the "emperor's new clothes" on physical enterprises, "turn around" funds may overwhelm physical enterprises. "

According to the text given at the press conference, 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" to repay the loan is as high as hundreds of millions of yuan.

"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 help reduce stress.

According to Xiong Xiangren, at present, Hougu Coffee has total assets of 3.9 billion yuan and a "debt ratio of more than 50%." Hougu Coffee, which he founded, 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.

The base is developing too fast.

Although Xiong Xiangren attributed the debt crisis of Hougu Coffee to unreasonable bank credit policies, he also admitted that there were internal reasons for the debt crisis when asked by reporters. Xiong Xiangren said: "from the internal point of view of the enterprise, the reason for this debt crisis is that we have made too much progress, and our biggest problem is that the base has developed too fast, and hundreds of thousands of mu of forest rights have been transferred in a few years. But these bases cannot quickly achieve the function of" hematopoiesis ", and we should carry out reasonable development according to the sales of the market."

At present, Hougu Coffee already has a coffee base of 270000 mu. At the press conference of the 4th China Mangshi (International) Coffee Culture Festival held on January 23, 2015, Li Gongqin, secretary general of Yunnan Coffee Industry Association, revealed: "up to now, the planting area of coffee in Yunnan has exceeded 1.6 million mu. Yunnan coffee production is expected to exceed 120000 tons this harvest season." This means that the coffee base of Hougu Coffee accounts for about 17% of the coffee base in Yunnan Province. In fact, in the past few years, not only the back Valley Coffee, but also the whole Yunnan Coffee has grown by leaps and bounds.

Obviously, the coffee planting area in Yunnan Province has actually exceeded the 2020 plan. In 2008, the coffee planting area in Yunnan Province was only 390000 mu. In the past few years, the coffee planting area has increased at an annual rate of more than 100000 mu, especially in 2013, the coffee planting area has increased from 1 million mu in 2012 to more than 1.4 million mu in 2013.

Behind the "Great Leap forward" development of coffee cultivation is the coffee awareness of Yunnan Province, especially the improvement of brand awareness is not as smooth as expected. Xiong Xiangren admitted that the development of Hougu Coffee in coffee cultivation in the past few years was irrational. After vigorously expanding the planting area, the pace of market promotion and brand promotion was slow, and the growth of sales could not support the growth of bank loans. The company is more dependent on banks.

The development of Hougu Coffee is the same as that of the whole Yunnan coffee industry-while desperately developing the planting base, ignoring the construction of the market and brand. The debt crisis of Hougu Coffee also makes the contradiction of the whole coffee industry in Yunnan more prominent.

Although admitting that the debt crisis is due to the rapid expansion of planting, Xiong Xiangren still believes that there is nothing wrong with the growth of coffee acreage in Yunnan, and his reason is that compared with the world, Yunnan's coffee acreage is still too small.

However, in the view of many people in the industry, affected by the debt crisis, the development of Hougu coffee will slow down for a period of time in the future, and the whole coffee industry in Yunnan may also slow down.

Bank of China and ICBC "untie" loans

On February 14, Hougu Coffee received a surprise: after paying attention to Hougu Coffee facing the debt crisis, some banks approved to handle the short-term liquidity policy of "lending new to the old" for Hougu Coffee, so as to "untie" Hougu Coffee debt.

According to reports, Bank of China (601988, stock bar) and Industrial and Commercial Bank of China (601398, stock bar) first proposed and provided 250 million yuan and 78 million yuan in short-term loans to Hougu Coffee to go through the procedures of "loan new and repayment of the old" for a period of one to three years. "this move has greatly reduced the debt burden of Hougu Coffee, enabled enterprises to pay more attention to operation and management, and enhanced their confidence and determination to get out of the predicament as soon as possible." Xiong Xiangren said.

It is understood that in order to avoid overdue loans, enterprises generally adopt two ways: one is to sell products cheaply to repay, which will naturally offset corporate profits; the other is to raise funds from private capital, but the high financing cost will completely engulf the reasonable profit space of enterprises. Xiong Xiangren frankly said that Hougu Coffee's debt crisis is only a microcosm of the predicament of real economic development, and hopes that financial institutions will adjust some of their financial policies. like fighting the fire, we will give policy support such as "extension" of corporate loans, "repayment of new loans" and "extension of working capital loans".

Xiong Xiangren has been distressed for months in the face of a possible debt crisis. In view of the reality of the enterprise, after careful consideration, he put forward the policy suggestion that financial institutions should extend the loan to the enterprise for one to two years without drawing or suppressing the loan; various states and cities in Yunnan have set up a platform for communication between enterprises in the real economy and creditors, and under the coordination and service of government departments, enterprises have reached a memorandum of understanding with creditors to exchange time for space so as not to affect the normal operation of the company and destroy the enterprise. It is hoped that according to the actual situation, judicial organs will give priority to out-of-court mediation, carefully file cases, and do not seal up assets and accounts immediately after receiving litigation requests, so as to ensure the normal operation of enterprises to the maximum extent; for entity enterprises with good growth, the state finance will allocate part of the funds to enterprises to increase credit and discounted interest on some loans, so as to effectively reduce the burden on enterprises.

In Xiong Xiangren's view, these suggestions are in fact only a summary and summary of the current national credit policy, not the first. He applied and called on the financial sector to make timely adjustments to the financial products used by enterprises according to the development needs of enterprises.

Once again, when talking about the Bank of China and the Industrial and Commercial Bank of China in time to enterprises to handle "loan new to the old" policy support, Xiong Xiangren eyes red, "very moved!" I did not expect that banks could be so bold and free to support the development of enterprises so quickly. " For at least a year, enterprises no longer have to rack their brains all day to solve the problem of "turning around", and enterprises no longer have to carry the high financial costs of private lending, and can finally embark on the track of sound development.

Xiong Xiangren also said frankly that through this crisis, enterprises should also reflect on their own shortcomings and strengthen their own management, so that they can really mature after the crisis and create more wealth for the society. Only in this way can we truly reflect the value of the government and banks in helping enterprises solve difficulties and get out of difficulties.