Chapter 31

Bankruptcy liquidation means the company is truly shutting down, with all assets liquidated, and the company ceases to exist.

However, bankruptcy reorganization aims to revitalize a company on the brink of bankruptcy, even one that has already entered the liquidation process. The difficulty of this, especially the complexity of the relationships that need to be coordinated, can be overwhelming.

As a star enterprise and major taxpayer in Jinzhou City, the Jinzhou municipal government has not been idle and has considered ways to save Hengyang Group from the brink of bankruptcy.

However, with a total asset value of 2.7 billion yuan, not only is there no working capital left, but the company also owes a huge amount of debt, with the total debt amounting to nearly 1.5 billion yuan!

Of which, bank loans alone amount to 680 million yuan! If it weren't for the current situation, who would want to see such a company go bankrupt? After all, many small businesses in Jinzhou rely on Hengyang Group to survive!

Ignoring the inquiries of Zhao and Meng, Yang Chen continued, "Yes, bankruptcy reorganization! I will register a new company to take full control of Hengyang Group. Can you help me calculate how much capital would be needed through normal procedures?"

"Are you... sure you're not joking with us?" Meng Haobin took a deep breath and said seriously, "The difficulty of bankruptcy reorganization is significant; it's not something you can just think about and accomplish!"

"I know the difficulty is considerable, which is why I specifically invited both of you to help come up with ideas tonight," Yang Chen said with a smile. "The financial aspect isn't too difficult. Besides, even if we can't pull it off in the end, we can still continue drinking tonight, right?"

Meng Haobin and Zhao Zeran exchanged glances and then nodded, "Hengyang Group's total assets of 2.7 billion yuan, if liquidated through normal judicial auction procedures, would not yield more than 1 billion yuan... all creditors would suffer significant losses."

Yang Chen nodded in understanding. The total assets are a set of figures that are only valid when the company is operating normally.

Once a company enters the judicial auction process, except for the land, everything else will be sold at a scrap price.

1 billion yuan in liquidated funds... Yang Chen even felt this was a bit high. Perhaps 850 million to 900 million yuan would be a more reasonable price. Any higher, and no one would want it.

Seeing Yang Chen nod, Meng Haobin continued, "Hengyang Group's debt is 1.495 billion yuan, meaning that the creditors will ultimately receive no more than 70% of their claims from the court, with a loss of over 30%! This is just the principal; as for interest, forget about it..."

"This is the result of bankruptcy liquidation. If we want to stop the liquidation and opt for reorganization, the creditors must first voluntarily apply for bankruptcy reorganization. Only if creditors representing more than 10% of the debt jointly apply for reorganization will the court accept it; otherwise, it's all for nothing."

"From the perspective of creditors willing to take the initiative to submit an application, the banks will certainly bite hard, as bankruptcy liquidation would cause the greatest loss to them. If there is a fool willing to take over at this point, the banks will certainly pressure the government to minimize their losses."

"Meanwhile, the Jinzhou municipal government and the Xibu district government also have their considerations. On one hand, they hope Hengyang Group can be revitalized, but on the other hand, they cannot let the price drop to the bottom line. If the cost of revitalization exceeds the cost of liquidation, the government will likely let Hengyang Group officially go bankrupt..."

After saying all this in one breath, Meng Haobin paused and then continued, "My father has never given up on the idea of revitalizing Hengyang Group. The city's top leaders mostly share this intention... If the funds are sufficient, the normal procedure for this round of bankruptcy reorganization would require an investment of no less than 1.5 billion yuan. Interest can be negotiated for appropriate reduction, but the principal must be fully repaid."

This was the answer Yang Chen wanted.

After listening to Meng Haobin, Yang Chen smiled and nodded, "This is the investment required through normal procedures. But what if we can turn some creditors and form a highly unified cooperation on certain issues... or pressure the group as an external investor to complete the reorganization?"

"For example?" Zhao Zeran's eyes lit up, seemingly understanding Yang Chen's intention.

Yang Chen didn't hide his plans and smiled, "If Hengyang Group goes into bankruptcy liquidation, the banks that provided loans to the group will suffer the greatest loss. If, hypothetically... someone is willing to take over and pay about 80% of the total debt, would the banks be interested?"

"You mean, you won't act directly but will use a form that offers about 10% more than the liquidation value to induce the banks to voluntarily apply to the court for bankruptcy reorganization?" Zhao Zeran slapped his forehead and said, "The banks would have no reason to refuse!"

"Exactly." Yang Chen's lips curled into a faint smile, "This way, the creditors receive more than they would from liquidation, and I save a significant amount of money in completing the bankruptcy reorganization of Hengyang Group... wouldn't that be a win-win situation?"

"How much capital can you mobilize now?" Zhao Zeran and Meng Haobin exchanged glances, finally understanding Yang Chen's true purpose for inviting them tonight!

Meng Haobin pointedly said, "Banks are not private enterprises. Although this plan is undoubtedly beneficial to the banks, it requires a person of sufficient influence to push it forward..."

"Don't worry, I'm not the type to act alone." Yang Chen was well-prepared and said softly, "I can raise about 1.2 to 1.3 billion yuan. After setting aside some for operational cash flow, I can use about 1.1 billion yuan..."

Pausing, Yang Chen continued, "Based on the reality of liquidating 900 million yuan in cash, I can clearly provide nearly 200 million yuan more... I don't plan to recover this money. Can you understand, brother?"

Zhao Zeran was deeply moved, and Meng Haobin also showed a delighted expression... Yang Chen had made his intentions very clear, how could they not understand?

Without a moment's hesitation, Zhao Zeran put aside all his reservations and laughed heartily, "Yang Chen, you're straightforward! Since you've been honest with us, I have a clear idea now! Don't worry, even if it's only a few hundred million, the government has no reason to refuse you with this approach!"

Zhao Zeran also revealed his true intentions.

Understanding Zhao Zeran's meaning, Yang Chen smiled brightly, stood up, and extended his hand, "Then, I'll leave this matter to you two... you have the connections and the influence, and I rely entirely on your help this time!"

"Too kind... everyone, let's each get what we want..."

Thus, when Tang Yino returned to the private room, Yang Chen and Zhao Zeran, Meng Haobin were already in a very close and intimate manner... If the Mad Taoist hadn't been sleeping soundly at his new home tonight, he would probably have burst out with the words 'hypocrisy' and unleashed his mocking skills...