RIP - Orienwise

China Orienwise - personal gurantee company. A case of someone expanding too fast and aggressively. In this mkt environment, this guy is going to be thrashed big time.

Headquartered in Shenzhen, China Orienwise Limited -- is a private guarantee company in China. As of August 31, 2006, the company had total assets of CNY 2.6bn (USD 329m). The company is 100% owned by the ultimate parent Credit Orienwise Group Limited, which is in turn majority owned by the founder Mr. Zhang Kai Yong through Orienwise International Holding Limited. Other strategic investors for Credit Orienwise include the Asian Development Bank, Citigroup Venture Capital International and Carlyle.

1. 2 Nov 05 Ctiibank took stake for $25m. Shenzhen based pte financial company with assets of $210m. BOA and ADB were first two investors.


2. 23 Mar 06 Carlyle took a stake for $25mm. Provides servies to small and SMEs. Total assets worth $187m.


3. 18 Oct 06 Headquartered in Shenzhen, China Orienwise Limited -- is a private guarantee company in China. As of August 31, 2006, the company had total assets of CNY 2.6bn (USD 329m). The company is 100% owned by the ultimate parent Credit Orienwise Group Limited, which is in turn majority owned by the founder Mr. Zhang Kai Yong through Orienwise International Holding Limited. Other strategic investors for Credit Orienwise include the Asian Development Bank, Citigroup Venture Capital International and Carlyle. Positive rating pressure could emerge with: a significant strengthening of its franchise; establishment of a longer track record of sustained credit strength, particularly in a down-cycle; continued improvements in risk management and asset quality, and a reduction of its reliance on banks for business; and a strengthening in the regulatory environment. On the other hand, negative rating pressure could emerge due to: an inability to sustain its franchise; a marked deterioration in asset quality; a significant rise in leverage whereby (debt + guarantee) capital exceeds 7x; liquidity deteriorates significantly; and the parent takes on large additional debt.


4. 22 Nov 06 Moody's Investor Service has today assigned a Ba3 foreign currency senior unsecured rating to the proposed USD bonds of China Orienwise. The proposed bonds will mature in 2011. However, if the company becomes a publicly listed company, it will have an option to call 35% of the bonds at a premium equal to the coupon. The bond is issued together with certain units of warrants which are not rated by Moody's.


5. 10 Apr 07 China Orienwise Group, a Shenzhen-based financial service company, could take over Century Securities, a Guangdong-based securities brokerage dealer, for CNY 680m (USD 87.2m).


6. 24 Sep 07 GE Commercial Finance(GE) invests USD 50m for 7.8% stake. MS as advisor.


7. 16 Oct 07 ADB, Carlyle and Citibank to increase stake after GE's recent stake purchase. Total guarantee volume has exceed $5.9bn as of 30 Jun07.


8. 25 May 08 Moody's Ba3 rating reflects relatively good financials; but strengths offset by short track record and high reliance on founder. In the near to medium term, the company will strengthen its existing franchise in established branches such as Shenzhen, Beijing, Shanghai and Xiamen, while continuing to expand its business in other locations such as Changsha, Guangzhou, and Hangzhou, etc. It will also expand its personal guarantee business and introduce new products to meet demands of the evolving financial system in China.


9. 5 Sep 08 China Orienwise announces investigation into allegations of fraud.


10. 21 Oct 08 China Orienwise downgraded by Moody's to Caa1; continues review.


11. 30 Oct 08 China Orienwise records losses of CNY 1.2bn for six months ended June 2008 China Orienwise recorded revenue of CNY 287.2m for the six months ended 30 June 2008, up from CNY 254.9m for the corresponding period for the previous year. The company recorded losses for the first six months of 2008 of CNY 1.2bn (USD 178m). This compares with a profit of CNY 152m for the first six months of 2007.
12. Included in China Orienwise's June 30, 2008 financial statements was a provision for entrusted loans of RMB 946.7 million and for financial guarantees of RMB 456.7 million, of which RMB 90 million was specifically for suspected fraudulent activities carried out allegedly by a former general manager. As a result, China Orienwise incurred a total net loss of RMB 1.2 billion for the first six months of 2008. Furthermore, the total provisions of RMB 1.4 billion represent 5 times China Orienwise's full-year net income for 2007 and around 60% of its shareholders' equity for end-2007.