This article is from WeChat official account:Times Weekly (ID: timeweekly), the original title “Debt exceeds 100 billion! Brilliance China Automotive formal bankruptcy reorganization, its four listed companies jumped “by: Jun Hill, Editor: strawberry, drawing from the title: Vision China

Brilliance Automobile, which was in deep debt crisis, finally could not escape the fate of bankruptcy and reorganization.

On the afternoon of November 20th, the Shenyang Intermediate People’s Court ruled that it accepted the creditor’s application for the reorganization of Brilliance Automobile Group Holdings Co., Ltd., marking that this car company has officially entered the bankruptcy reorganization process.

The court’s ruling stated that the situation that Brilliance Group’s existing assets are not enough to pay off all debts has the bankruptcy reasons stipulated in the Corporate Bankruptcy Law. At the same time, Brilliance Group has the value and possibility of salvation, and the necessity and feasibility of reorganization.

Just this morning, Qi Kai, the vice president of Brilliance Automotive Group, responded to reporters’ rumors of bankruptcy, saying that he “has not heard of it” and said that the group’s current operations are “all normal”.

Affected by related news, the listed companies of Brilliance Automotive Group have seen a substantial increase. Hong Kong-listed Brilliance China (01114.HK) rose more than 8% to close at HK$7.48, Xincheng Power(01148.HK) rose more than 7.5%. Jinbei Automobile (600609) listed on the Shenzhen Stock Exchange and Shenhua Holdings (600653) The daily limit will be closed after the news is announced.

1. Liabilities exceed 100 billion

Since this year, rumors about Brilliance Auto’s debt default have continued.

In August, many of the remaining bonds of Brilliance Auto plummeted, and creditor banks formed a debt committee on the debt issue of Brilliance Auto. In late October, the corporate bond “17 Huaqi 05” issued by Brilliance Auto could not be redeemed at maturity. At that time, Brilliance Group promised that the company would pay interest before November 5, but the redemption of the principal was nowhere in sight. Among them, the creditor personality Zhizhi Automobile Technology Co., Ltd. filed an application for bankruptcy and reorganization of Brilliance Group to the court on November 13.

Screenshot of National Bankruptcy and Reorganization Case Information Network< /p>

On November 16, Brilliance Auto issued an announcement stating that at present, Brilliance Auto has constituted a debt default amount of 6.5 billion yuan and a total of 144 million overdue interest. Due to the shortage of corporate funds, the renewal credit approval has not been completed, resulting in failure to repay. The debt default of Brilliance Auto had a significant impact on the production and operation of Brilliance Auto’s headquarters, resulting in a deterioration in the financial situation and greatly affecting its solvency.

For investors who hold Brilliance Auto bonds, the safety of funds has become their biggest concern. According to the data of GF Securities Development Research Center, as of October 23, 2020, there are 14 outstanding bonds of Brilliance Auto, with a total bond balance of 17.2 billion yuan. From the perspective of maturity distribution, Brilliance Auto’s maturity and resale pressures will be concentrated in 2021 and 2022. The maturity and resale bonds will be 6.5 billion yuan and 9.2 billion yuan respectively, and the number of bonds involved will be 4 and 8 respectively.

As for total liabilities, according to the data of the 2020 bond semi-annual report of Brilliance Auto, the group’s total liabilities are 132.844 billion yuan. After deducting goodwill and intangible assets, the debt-to-asset ratio is 71.4%. End of termThe balance of gold and cash equivalents was 32.677 billion yuan.

In fact, since the beginning of this year, Brilliance Auto has been enforced by the court for failing to perform its legal obligations on time, 19 times. The cumulative amount of execution during the year was as high as 167 million yuan, and the total amount currently being executed is nearly 390 million. According to the data from Tianyan Check, Brilliance Auto has 6 pieces of equity pledge information, all of which are currently in a valid state. The amount of pledged equity is as high as 447 million shares.

2. Profits are too dependent on BMW Brilliance

The credit rating report of Standard & Poor’s believes that Brilliance Auto does not have strong control over its core subsidiary, BMW Brilliance Automotive Co., Ltd., while the company’s own brand models such as Brilliance Zhonghua, Huasong, and Brilliance Jinbei The lack of profitability of other products is an important reason for the tight cash flow of Brilliance Auto.

Brilliance Auto’s own brand

According to the 2020 semi-annual report of Brilliance China, a listed company of Brilliance Automobile Group, Brilliance China’s revenue in the first half of the year was 1.45 billion yuan, a year-on-year decrease of 23.85%; however, its net profit achieved 4.045 billion yuan, an increase of 25.24%. Among them, the profit contributed by BMW Brilliance to Brilliance China reached 4.383 billion yuan, an increase of 23.4% from 3.552 billion yuan in the same period last year. In other words, if the profit contributed by BMW Brilliance is removed, Brilliance China’s business losses in the first half of this year amounted to 338 million yuan.

In fact, the profitability of Brilliance Auto has been too dependent on BMW Brilliance for many years.

According to its financial report data, during the five years from 2015 to 2019, after excluding the profit sharing of BMW Brilliance, Brilliance’s losses reached 540 million, 600 million, 860 million, 420 million, and 1.064 billion respectively, with an overall loss of 3.484 billion.

Since this year,Brilliance Auto tried to save itself in many ways.

In May of this year, Brilliance Automobile Group and Liaoning Transportation Construction Investment Group Co., Ltd. and its subsidiary Liaoning Transportation Investment Co., Ltd. (hereinafter referred to as “Liaoning Trading”) Signed a strategic investment agreement to sell 200 million shares of Brilliance China to Liaoning Trading at USD 0.01/share, accounting for 3.96% of Brilliance China’s equity. On July 9th, Brilliance Automotive Group and Liaoning Communications entered into a strategic investment agreement to sell 400 million shares of the company to it, accounting for about 7.93% of the company’s total issued share capital.

However, the extreme weakness in free-brand car sales eventually dragged down Brilliance. According to Brilliance China’s financial report, Brilliance Renault sold only 11,733 light buses and MPVs in the first half of the year, a year-on-year decrease of 42.0%, while Brilliance China’s sales in the first half of this year were only more than 3,000.

3. Bankruptcy and reorganization will not affect listed companies

The way in which the bankruptcy reorganization will be carried out has attracted much attention from the market.

According to Xinhua News Agency, according to the law, the Shenyang Intermediate People’s Court will appoint the manager of Brilliance Group to be fully responsible for all tasks during the bankruptcy and reorganization of the enterprise, including accepting and identifying creditors’ claims, preparing and submitting a draft reorganization plan. Voting at the creditors meeting, etc. The creditors will be paid according to the reorganization plan finally approved by the court.

The relevant person in charge of Brilliance Group stated that this reorganization only involves the self-owned brand of the group’s headquarters, and does not involve the group’s listed companies and joint ventures with BMW and Renault. Earlier, an insider revealed to the media that Brilliance Renault held a board of directors on November 19, and it was decided that both parties would complete a capital increase of 600 million yuan. It is reported that this is the last capital injection.

As for BMW Brilliance, which used to be an important source of profit, Brilliance Auto’s right to speak in the joint venture has been greatly reduced. In 2018, Brilliance and BMW signed an agreement. BMW will acquire a 25% stake in BMW Brilliance from Brilliance Auto before 2022. At that time, BMW and Brilliance Auto will hold 75% and 25% of BMW Brilliance respectively. BMW will obtain the actual shares of BMW Brilliance. Control.

A representative of BMW told the media on November 17 that the capital increase plan will not be affected by rumors of Brilliance Auto’s reorganization. The person in charge of Brilliance Group stated that as BMW’s most important partner in China, after the reorganization of the group,It is expected to be reborn and try our best to recover the losses of creditors. At the same time, BMW Brilliance is still a stable source of profits in the future, and it will continue to launch new products and expand its scale.

We still need to wait and see what impact the bankruptcy reorganization will have on the daily operations and development plans of Brilliance Auto. Qi Kai, vice president of Brilliance Group, once publicly stated that “Brilliance Xinri, a joint venture of Brilliance Group, is expected to put into production the first new energy vehicle by the end of this year.” Now Brilliance Automobile needs bankruptcy and reorganization, and the launch of this model may become indefinite.


This article is from WeChat official account:Time Weekly (ID: timeweekly) author: hill Jun, edit: strawberry