This article is from WeChat official account: Interface News (ID: wowjiemian) , Author: known among Tao, editor: Chen Fei-ya, from the head of FIG. : Visual China

According to Xinhua News Agency, the Shenyang Intermediate People’s Court ruled on the 20th to accept creditors against Brilliance Automobile Group Holdings Co., Ltd. (hereinafter referred to as Brilliance Group) The application for reorganization marks that this car company has officially entered the bankruptcy reorganization process.

This is not surprising.

The decision of the Shenyang Intermediate People’s Court is mainly aimed at a supplier’s request for bankruptcy and reorganization. On November 13, the National Corporate Bankruptcy Remarks Case Information Network released that Gezhi Automotive Technology applied to the Shenyang Intermediate People’s Court of Liaoning Province for the reorganization of Brilliance Automotive Group Holdings Co., Ltd. The case number is (2020) Liao 01 broke Shen No. 27.

Accepting the reorganization does not mean that Brilliance Group has gone bankrupt. Xu Chenyu, a lawyer of Zhonglun W&D Law Firm, explained that bankruptcy reorganization refers to enterprises that have statutory bankruptcy reasons but have the hope of rebirth, through the application of the enterprise itself or its creditors, the presiding and relevant interests in the court With the participation of people, it is a system to carry out business restructuring and debt adjustments to help companies get rid of financial difficulties and restore business capabilities.

After the court decides to accept the application for reorganization of Brilliance Auto, the follow-up process generally includes: appointing the administrator, receiving the declaration of claims, holding the first creditors meeting, submitting the draft reorganization plan, and the creditors meeting on the draft reorganization plan. Vote, (if approved) apply for court approval of the draft reorganization plan, (If approved by the court order) The reorganization procedure is terminated and the reorganization plan is executed. If the execution period of the reorganization plan expires and the debtor has completed the execution of the company and the company returns to good condition, the reorganization procedure ends and the company resumes normal operations.

However, it should be noted that bankruptcy reorganization involves the game of interests of many stakeholders, and most bankruptcy reorganizations will be accompanied by creditors’ claims discounts or extensions, which present certain difficulties.

Lawyer Huang Hao, senior partner of Wanshang Tianqin Law Firm, further explained that the reorganization plan is the core document of bankruptcy and reorganization. According to the law, the debtor or the administrator shall submit a draft of the reorganization plan to the people’s court and the creditors’ meeting within six months from the date when the people’s court ruled on the debtor’s reorganization (Including the business plan, the classification of claims, the adjustment and compensation plan, the execution period of the reorganization plan, etc.), the court organizes the creditors to vote in groups. When each voting group passes the reorganization plan draft, the reorganization The plan is passed.

It should be noted that during the reorganization period, if “the debtor’s business conditions and property conditions continue to deteriorate, and there is no possibility of salvation; or the debtor has fraudulently reduced the debtor’s property or other actions that are significantly detrimental to the creditor; or Due to the debtor’s behavior, the administrator is unable to perform his duties.” At the request of the administrator or interested parties, the court will rule to terminate the reorganization process and declare the debtor bankrupt.

Brilliance Group’s debt default has also attracted the attention of regulators. At present, the China Securities Regulatory Commission has carried out special inspections in accordance with the law. According to the inspection situation, on November 20, the Huachen Group issued a warning letter for administrative supervision measures and decided to file a case for suspected violations of information disclosure. The intermediary institutions involved in the Brilliance Group’s bonds will be simultaneously verified and severely investigated. Relevant violations of laws and regulations.

In addition, the reorganization of Brilliance Group 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.

Brilliance Automobile Group is a key state-owned enterprise affiliated to the State-owned Assets Supervision and Administration Commission of Liaoning Province, with assets close to 200 billion yuan. Currently, it owns 4 listed companies, namely Brilliance China (01114.HK), Jinbei Automobile (600609.SH), Shenhua Holdings (600653.SH) and Power Holdings (01148.HK).

Shenhua Holdings faces the risk of caps, and the controlling shareholder may also change.

From equityLook, as of November 16, Brilliance Group directly and indirectly held 446 million shares of Shenhua Holdings, accounting for 22.93% of the company’s total share capital. The number of frozen shares was 108 million shares, accounting for 24.13% of its total holdings. 5.53% of the company’s total share capital. As the indirect controlling shareholder of the company, Brilliance Group is expected to have a significant impact on the company’s equity structure once it enters the reorganization process.

From the perspective of debt, Shenhua Holdings’ accounts receivable and guarantee mine will explode. Currently, the company’s accounts receivable from Brilliance Group and its related parties are 140 million yuan, mainly for daily automobile purchases and sales, and no relevant provision has been made. It should be noted that the company’s net profit in 2019 was a loss of 253 million yuan, while the first three quarters of this year was a loss of 35 million yuan. Once a large impairment loss is accrued due to accounts receivable, two consecutive years of losses will make the company usher in The hated crisis.

The bigger hidden danger comes from the guarantee. The balance of guarantees provided by Shenhua Holdings to Brilliance Group and its related parties is as high as 446 million yuan, accounting for 24.19% of its 1.844 billion yuan in parent owners’ equity. Among them, 400 million yuan is the counter-guarantee provided by the company to Brilliance Group’s financing guarantee for the company, and 46 million yuan is the survival guarantee provided by the company to the atomic company Shanghai Huachen Automobile Leasing Co., Ltd. Once the dominoes of the “mother-child” company’s cross-correlation guarantee are pushed, the risk of cross-correlation default will follow after all, and the large amount of estimated liabilities may overwhelm Shenhua Holdings.

On the evening of November 20, Shenhua Holdings also announced that the restructuring plan may have a certain impact on the company’s equity structure and other aspects.

The problem with another subsidiary, Jinbei Auto, is who will take over the stall that may lose nearly half of its equity.

From the perspective of equity, Brilliance Group holds 266 million shares of the company through its wholly-owned subsidiary Shenyang Automobile Industry Asset Management Co., Ltd., accounting for 20.32% of the company’s total share capital. Among them, 100 million shares were used for margin trading, accounting for 37.53% of the total number of shares in the company held by him, and 74 million shares were in judicial freeze, accounting for 27.63% of the total number of shares in the company held by him.

The performance of Jinbei Automobile is slightly better than that of Shenhua, which makes it more “safe”. At present, the company’s accounts receivable from Brilliance Group is 50.07 million yuan, and accounts receivable from Brilliance Renault Jinbei Automobile Co., Ltd. are 26.77 million yuan, both of which are formed by the purchase and sale of daily auto parts. The bankruptcy of Brilliance Group increased the possibility of the company’s provision for large amounts of bad debts. In the first three quarters of this year, the company achieved a net profit of 60.41 million yuan. Facing the controlling shareholder’s accounts receivable of 76.77 million yuan, Jinbei Automobile will also fall into a profit crisis this year.

Jinbei AutomobileNearly half of the owners’ equity are at risk. At present, the balance of guarantees provided by the company to Brilliance Group and its related parties is 530 million yuan, accounting for 47.03% of its 1.127 billion yuan in parent owners’ equity. The bankruptcy and reorganization of Brilliance Group put relevant guarantees into huge risks. Brilliance Group issued a letter of undertaking to the company in June 2019, and smoothly and effectively released the relevant guarantees at the end of this year. However, the bankruptcy issues make unfulfilled promises a bad check. At present, of the total guarantee of 475 million yuan involved in the above-mentioned commitments, 360 million yuan is being sued. The bankruptcy of Brilliance Group also exposes the company to the risk of accruing large amounts of estimated liabilities.

On the evening of November 20, Jinbei Automobile also announced that the reorganization of Brilliance Group may have a certain impact on the company’s equity structure, accounts receivable and other aspects.

There are still many things to watch for the future reorganization of Brilliance Group. The most important point is what will happen to the shares of Brilliance BMW and Brilliance Renault held by Brilliance Group.

In 2018, Brilliance and BMW signed an agreement: before 2022, BMW will acquire a 25% stake in BMW Brilliance from Brilliance Auto. At that time, BMW and Brilliance Auto will hold 75% and 25% of BMW Brilliance respectively, and will no longer Included in the consolidation scope of Brilliance Auto. As one of the three major luxury brands, BMW Brilliance always ranks among the top ten in production and sales. However, once the Brilliance Group goes bankrupt, the course of its 25% equity interest in BMW Brilliance remains interesting.

This article is from WeChat official account: interface News (ID: wowjiemian) , author: known among Tao, editor : Chen Feiya