Auto Dealer Pang Da Group Plans Overseas Debt Issuance to Ease Fund Pressure

Auto Dealer Pang Da Group Plans Overseas Debt Issuance to Ease Fund Pressure

Tang Shihua

Date: Fri, 05/25/2018 - 16:12 / source:Yicai
Auto Dealer Pang Da Group Plans Overseas Debt Issuance to Ease Fund Pressure
Auto Dealer Pang Da Group Plans Overseas Debt Issuance to Ease Fund Pressure

(Yicai Global) May 26 -- Less than two weeks after announcing it will sell all assets of its five Benz 4S shops in North China, Pang Da Automobile Trade Group Co. now says that it will issue bonds valued at no more than USD300 million through its overseas subsidiary in order to ease the financing pressure over the company.

The dollar bonds will be issued to investors meeting the subscription conditions, with three to five years issuance term. The interest rate will be determined by the market. All funds raised through the issuance will serve as supplement working capital and for adjusting debt structure, said a statement from the auto dealer on May 23. However, it gave no further details regarding where the bonds will be issued.

Pang Da Group is a major automobile distributor with annual operation revenue of about CNY70 billion (USD11 million) last year. However, given its operation performance, the company has been struggling with deficit since its listing in 2011 due to rapid expansion.

Performance reports released by the company over the years show that from 2011 to last year, the net profit of the group was only positive in 2016. The asset-liability ratio of the company also stayed at a high level, keeping above 80 percent from 2011 to 2016. Although the figure dropped just below 80 percent for the first time last year, it was still far beyond those of the company’s domestic counterparts.

Apart from continuously searching for financing, Pang Da Group has scaled down its operations by closing some of its outlets in recent years in a bid to ease fund pressure. It said on May 14 that it will sell all shares of its five Benz 4S shops in North China to China Grand Automotive Services Co., another automobile distributor, and attained CNY616 million pre-tax profit.

Pang Da Group achieved CNY70.485 billion takings in 2017, a yearly increase of almost 6.8 percent, whereas its net profit distributable to shareholders of the listed company plummeted by about 44 percent to CNY212 million, publicly available data showed.

Performance of Pang Da Group continued to decline in the first quarter of this year with CNY14.123 billion takings within the period, a year-on-year decrease of nearly 11 percent, and a net profit of CNY45.797 million, a year-on-year drop of about 61 percent, showed its financial report.

Editor: Mevlut Katik

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Keywords: FINANCING, Bond Issuance, Car Dealer, Pang Da Automobile Trade