Chongqings richest mans old age crisis: a huge loss of 2.6 billion yuan

category:Finance
 Chongqings richest mans old age crisis: a huge loss of 2.6 billion yuan


Life never starts too late. Yin Mingshan, the richest man in Chongqing, has been interpreting this sentence with his own experience. At the age of 23, he was imprisoned for 18 years. At the age of 47, he earned 600000 yuan from starting a business in the sea. At the age of 54, he entered the motorcycle industry. In 10 years, he became the largest motorcycle business in China. At the age of 66, Yin Mingshan offered 200000 yuan and vowed to build Lifan, Chinas first fully autonomous car.

In his 70s, he put Lifan on the market. However, the scale of success did not tilt to him again. In the third quarter of 2019, Lifan lost 2.6 billion yuan, and the company was even declared bankrupt. Until a large number of creditors come to the door for recourse, Yin Mingshan, who should have enjoyed his old age, had to start learning how to save an enterprise on the brink of extinction.

01

Creditors chase

We should not make the government unhappy, banks unhappy or state-owned enterprises unhappy..

Yin Mingshan once summed up the three no principle for the survival of private enterprises, but now he has failed to do one, which makes the bank unhappy.

Yin Mingshan, chairman of Chongqing Lifan Group

If the Chongqing municipal government did not urgently set up a creditor committee to require banks to do not lend, do not pressure loans, and keep lending, Lifan might have fallen into the banks loan suspension.

Lin Fan told the market, we have a bill of exchange of 500000 yuan, which expires in January 2019. It took more than a week to call the finance company, and they told me that it would be delayed for three months before the payment.. Lin Fans auto parts company has no business with Lifan. This bank acceptance bill is transferred from the customers hand.

After three months of bitter waiting, Lin Fan decided to go through legal procedures, only to find that many companies have sued Lifan finance. Most of these bank acceptance bills are issued by Chongqing Lifan Passenger Vehicle Co., Ltd. (hereinafter referred to as Lifan passenger vehicle), and Lifan finance is the acceptor, both of which are companies under Lifan. City search found that more than 30 companies have filed lawsuits against Lifans related companies on the bill issue. Lifans finance alone involved more than 5 million yuan. The plaintiffs were mainly auto parts suppliers.

Its an indisputable fact that debt is at its peak.

By the third quarter of 2019, Lifans asset liability ratio is as high as 78%, which is at a high level in the automobile industry. Among the total liabilities of 17.9 billion yuan, at least 12.1 billion yuan are interest bearing liabilities. More urgently, 9 billion of them are short-term loans, which means Lifan needs to repay them in a short period of one year.

The situation of Lifan Holding Co., Ltd. (hereinafter referred to as Lifan holding) is more serious. Lifan holdings semi annual report on bonds in 2019 shows that as of June 2019, Lifan holdings current liabilities are close to 30 billion yuan, because 400 million yuan of loans are overdue due to financing difficulties.

Lifan Holdings has borrowed almost all the money it can. 25 banks provided 12.6 billion yuan of credit to it, and as of June 2019, only 450 million yuan remained unused.

In order to obtain financing, Lifan holding has mortgaged 99.6% of Lifan shares. Based on the poor financial situation of Lifan Group, united credit rating company lowered the rating of Lifan stock bonds from AA to AA -.

Yin Mingshan lost his heroic ambition at that time. Before the half year report with a loss of 900 million yuan was published, he took his wife Chen Qiaofeng, son Yin Xidi and daughter Yin Suowei, and the whole family joined hands to reduce the cash flow of 8.9 million yuan. Then the third quarter report was released, with a loss of 2.6 billion yuan.

The company can not guarantee, but its own money can guarantee a little bit.

02

Business slump

The people who reduced their holdings with Yin Mingshan, as well as a group of senior executives of the company, after all, the warm spring river, the duck prophet, began to reduce their holdings with a group of people who are most familiar with the company, which is undoubtedly a clear signal to the outside world: I am not very optimistic about my own company. Although 2019 is the darkest year for the automobile industry, Lifan has been hit by much higher than the industry average.

According to the production and sales volume released by Lifan, the production of fuel vehicles and new energy vehicles in the first three quarters were 18000 and 1843 respectively. As the main driving point of Lifan, the lowest monthly output of fuel vehicles is only 34. In the first nine months of 2019, under the influence of the upcoming implementation of the six new standards, Lifan launched activities to vigorously digest the inventory. However, the total sales volume of fuel vehicles and new energy vehicles does not exceed 25000. With the implementation of the sixth national standard,

Lifan has not yet been able to launch models that meet the national six standards, and the original backlog of national five models faces the embarrassment of being unable to be licensed.

As of June 2019, Lifan has about 600 million yuan of inventory goods after the provision of 280 million yuan of falling price reserves. If the proportion of passenger vehicles in inventory is too high, these finished vehicles will face the risk of being unable to sell and realize.

Guangzhou auto show 2018 - Lifan Auto fast charging

As a result of the reduction of R & D investment, the product can not keep up with the market is gradually emerging. A Lifan passenger car employee told the city, before the construction of the new base, most of the division of labor was transferred to the third factory, but the third factory rarely produces, because there is nothing to do, many workers are on holiday, only get a very low basic wage.. He revealed that the main factory is still producing motorcycles.

In the 15 years of Yin Mingshans car building, passenger cars have become the mainstay of Lifans revenue and profit creation. The status of motorcycles is getting lower and lower. As of June 2019, motorcycles account for only 24% of the companys total revenue. The gross profit margin of passenger car and parts business, which accounts for half of the revenue, has plummeted by 11 percentage points, only 2.5%, less than 20% of that of ordinary car enterprises.

The rapid fall of passenger car business has led to the increasing tension of Lifans capital shortage chain.

Many suppliers will take Lifan to court, either to demand payment of bills or to apply for freezing Lifans assets.

Li Zhe, an auto parts supplier in Chongqing, said to the city: we have not supplied goods for a long time. The original payment is not in place. Who dares to supply?. In addition to the distrust of suppliers, Lifans dealers are also on the road of safeguarding rights.

Loss sale

Lifans fall actually occurred in 2018, but it was quietly covered by the net profit of 250 million yuan. At that time, Lifans non net profit loss attributable to shareholders of listed companies was 2.1 billion yuan, that is, Lifans pure operation was a loss.

Although Lifan has been making losses in the past three years, the amount of losses in 2018 is 10 times that of the previous two years, which is no exaggeration. Yin Mingshan, a veteran of the shopping mall, has turned a huge loss of 2.1 billion yuan into a profit of 250 million yuan, with a year-on-year increase of 48% in net profit, creating a prosperous scene.

How did he do it? Five days before the deadline of the annual report, the 150000 passenger vehicle production base of Lifan passenger vehicle company suddenly announced the relocation and upgrading, for the reason of conforming to the urban development plan and reducing the companys operating costs.

The 740 Mu plant was purchased by Chongqing Liangjiang New Area Land Reserve and renovation center at a price of 3.3 billion yuan, and 2.4 billion yuan was received immediately, so Lifan confirmed the asset disposal income of 2 billion yuan. The relocation of factories is not enough to fill the deficit. If you want to make profits, just resell the equity.

On December 28, 2018, Lifan Co., Ltd. signed an agreement with Chongqing Xinfan Machinery Equipment Co., Ltd. (hereinafter referred to as Chongqing Xinfan) to transfer 100% of the equity of Chongqing Lifan Automobile Co., Ltd. to Chongqing Xinfan, with the transfer price of 650 million yuan and confirmed investment income of 600 million yuan.

Chongqing Lifan car park

This not only fills in the loss, but also profits.

Yin Mingshan has been fighting for decades in Chongqing. It is understandable that the Chongqing municipal government has rescued him at the critical moment of Lifan. However, who is Chongqing new sail? The price of 650 million yuan is more than 770 times higher than the valuation of Chongqing Lifan Automobile Co., Ltd.

Tianyan inspection shows that after Chongqing Xinfans equity penetration, it is under the control of BAIC Hejia Information Technology Co., Ltd., i.e. Li Xiang, the founder of chehejia, is the actual controller. After the completion of the transaction, chehejia obtains the qualification to build a car.

In fact, chehejia has already met Liangjiang New District of Chongqing. The two sides signed a contract in August 2018. Chehejia plans to invest 11 billion yuan to build a smart car manufacturing base in the district. In the two transactions, Liangjiang New Area has played the role of timely rain to save Lifan and the crisis.

Yin Mingshan has begun to discount assets, but there is no way to replenish funds.

15 years ago, when he spent 200000 yuan to enter the passenger car industry, Yin Mingshan would not have thought that Lifan would go to the step of selling assets to survive. At that time, he was confident, rebellious and courageous, and now he is gone.

(at the request of the visitors, Lin Fan and Li Zhe are aliases)