Huachen groups dilemma: the default credit rating of 1 billion bonds has been continuously downgraded

category:Finance
 Huachen groups dilemma: the default credit rating of 1 billion bonds has been continuously downgraded


On October 23, it was reported that brilliance group failed to honor the private placement bond 17 Huaqi 05 on schedule, resulting in substantial breach of contract. At present, brilliance group is negotiating with investors about cashing. According to relevant rules, all its bonds will be suspended. This is also the first time in the history of brilliance group that there has been a default on open market bonds.

According to the data, 17 Huaqi 05 was issued in October 2017, with a current balance of 1 billion yuan and coupon of 5.3%, with a maturity of 3 years and due to be cashed on October 23, 2020.

In addition, brilliance group also failed to cash in full and on time the Jiangsu trust - xinbaosheng 158 (brilliance automobile) collective fund trust plan (hereinafter referred to as xinbaosheng 158). Jiangsu trust held a beneficiarys meeting. After deliberation and voting at the meeting, Jiangsu trust issued a notice of early repayment to brilliance group.

According to the notice of prepayment issued by Jiangsu trust, brilliance group should cash the loan principal of RMB 1.001 billion, the interest of RMB 20 million and the default interest of RMB 6.6838 million on October 12. But as of October 15, brilliance group did not honor the loan principal and interest as agreed.

Meanwhile, according to the investment contract of Taiping Huachen automobile manufacturing industry upgrading debt investment plan signed by brilliance group and Taiping Asset Management Co., Ltd., trustee of debt investment plan, brilliance group shall allocate quarterly interest payable on September 21, 2017. As of October 14, brilliance group had not transferred the quarterly interest payable to the trustee account of the debt investment plan.

In terms of short-term debt repayment pressure, by the end of March 2020, the total interest bearing debt of brilliance group was 67.744 billion yuan, of which the short-term interest bearing debt was 48.396 billion yuan, accounting for 71.44% of the total short-term interest bearing debt. As of the issuance date of the announcement, brilliance group did not provide clear repayment source arrangement of 17 Huaqi 05.

In August, brilliance group was exposed to be in debt crisis, and many of its existing bonds fell sharply, which caused panic selling in the market. Dongfang Jincheng pointed out in the rating report that among the 122.675 billion yuan of total liabilities of brilliance group, the current liabilities accounted for 78%, and the debt structure needed to be optimized; the asset liability ratio was close to 70%, higher than the average level of the industry.

Then, the brilliance bond Committee was established under the leadership of Shenyang Financial Supervision Bureau and Liaoning Provincial Bank Supervision Association, with Everbright Bank (601818, stock bar) as the main leading bank. It is understood that the reason for the establishment of the debt committee is that brilliance group wants to sell the equity of BMW Brilliance, and the banks gradually give no credit, so the enterprises can not bear it. Therefore, the government helped to coordinate, and each bank set up a debt committee to maintain non withdrawal loans and increase loans under appropriate circumstances. Previously, it was reported that it was in the stage of reporting creditors rights.

According to the industrial and commercial information, brilliance group currently has 18 pieces of information about the person to be executed, and the target of execution is 503539376 yuan (about 503.5 million yuan).

Without BMW, what will brilliance group do in the future?

According to the industrial and commercial information, brilliance group was established in September 2002 with a registered capital of 800 million, and Yan Bingzhe is an enterprise legal person. The major shareholder is the state owned assets supervision and Administration Commission of Liaoning Province, accounting for 80% of the shares, and Liaoning social security foundation holds 20% of the shares. According to public information, brilliance group owns four listed companies, namely Brilliance China, Jinbei Automobile (600609, Guba), Shenhua holding (600653, Guba) and Xinchen power. Its brands include brilliance Sinochem, Jinbei, Huasong, BMW Brilliance and brilliance Renault.

In 2017, brilliance Group recorded revenue of 126.379 billion, with a year-on-year growth of 10.82%, net profit of 420 million, a year-on-year increase of 36.36%; in 2018, revenue was 152.968 billion, net profit was 458 million; in 2019, revenue was 181.130 billion, and net profit was 279 million. In the first half of 2020, the revenue was 84.630 billion, with a year-on-year increase of 1.85%, and a loss of 196 million, a year-on-year decrease of 378.07%.

From 2015 to 2018, BMW Brilliance has contributed 3.823 billion yuan, 3.993 billion yuan, 5.233 billion yuan, 6.245 billion yuan and 7.626 billion yuan to brilliance group respectively. The profit scale of BMW Brilliance to brilliance group has been expanding.

In 2019, brilliance group will sell 721800 passenger cars and 78600 commercial vehicles. Among them, BMW Brilliance sold 545500 vehicles, accounting for 75%. In 2019, the profit of Brilliance China will reach 6.762 billion, with a year-on-year increase of 16.18%. However, among the 6.762 billion profits, brilliance BMW contributed 7.626 billion yuan. In other words, excluding the profit contributed by BMW Brilliance, other businesses of brilliance lost 864 million yuan.

In October 2018, brilliance group announced that it plans to sell 25% equity of brilliance BMW to BMW group before 2022, with the transaction price of RMB 29 billion; meanwhile, the shareholding ratio of BMW Group in brilliance BMW will rise from 50% to 75%. At that time, BMW Brilliance will no longer be included in the consolidated statements of brilliance group. According to the current situation, the financial report of brilliance group will be even worse.

With the deterioration of the debt risk of brilliance automobile, the main credit rating of brilliance group is also declining. In less than a month,

Dongfang Jincheng lowered the main credit of brilliance group from AAA twice to AA -; Dagong international lowered its main credit from AAA twice to a +, dropping four grades.

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Brilliance group on the verge of Bankruptcy: relying entirely on BMW

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A good hand is broken! Look at the capital Bureau behind domestic BMW (source: Qingliu)

Capital is a story book.

Hello, everyone. Im qingliujun who is trying to make money to buy a car. When it comes to the deduction of new car labels, BMW Brilliance will certainly not escape.

Since 2006, brilliance group has been ranked first among tax paying enterprises in Shenyang for 15 consecutive years, and the tax payment was even more than half of the total amount of top ten tax payers in Shenyang. Sounds great, doesnt it? But in fact, all the aura and glory comes from BMW, not brilliance.

As a matter of fact, since July this year, brilliance has fallen into a stock bond storm, with many bonds plummeting, and media reports are often marked with the words 100 billion debt topping. It can be said that overnight, the building will collapse.

This video will tell you the story of BMW Brilliance and the big guy behind it. How did Yangrong, a big man who once manipulated the capital maze and put the gold cup on the throne of Chinas first share in the U.S., was kicked out of the market after achieving brilliance? How did brilliance, which was once famous and even equalled with BMW, play a good hand of cards poorly?

The operation is as fierce as a tiger, and it is the first company to go to the United States

In the video of Henan pyramid marketing organization insider disclosure in the Qingliu plus series, we once mentioned that the original stocks are always famous for their low price and ultra-high return. It is easy for the uncles and aunts to fall in love with the original stocks, because in their young age, some people really became rich overnight because of the original stocks. For example, Yangrong, entering the auto industry, made a fortune by original stocks.

In 1987, Zhao Xiyou, director of Shenyang Agricultural machinery and automobile industry bureau, was ordered to combine more than 50 auto parts enterprises in the city into Jinbei Automobile Company. At that time, the golden cup was short of funds and was on the verge of bankruptcy, so it decided to try to reform the joint-stock system to raise funds. In 1988, the golden cup first publicly offered 100 million yuan of preferred shares to the public, at a rate of 1 yuan per share. At that time, almost no one knew about the stock, so half of these original shares did not sell after the end of the subscription period.

After all, he was a man who worked in the East Lake Hotel in Shanghai. With the money made in the stock market and borrowing money, he bought 46 million original shares of Jinbei in one fell swoop and entered the automobile industry.

After borrowing money to buy shares, Yangrong began to carry out radical reform on the golden cup. First, in 1991, it established a joint venture with Hainan Huayin International Trust and Investment Co., Ltd. and Jinbei Automobile Co., Ltd., and then bought 40% of the shares of Jinbei Automobile with us $12 million in 1991, and then expanded the shareholding ratio to 51% through share exchange operation, becoming the largest shareholder.

Yangrongs courage and ambition are more than that. He wants the gold cup to be listed in the United States and put the five-star red flag on Wall Street. But at that time, China did not even have the Securities Regulatory Commission, and it was a dream to go to the U.S. stock market. In addition, one of the conditions for listing in the U.S. stock market is that private ownership cannot be allowed, which means that Yangrong must give up its shares.

But there is no plate Yangrong cant handle. The next step is to witness his operation.

Yangrong first opened a shell company in Bermuda, called Brilliance China Automobile Co., Ltd. After that, four institutions, including the central bank and the China Institute of finance, set up a non-profit organization, China financial education foundation, in Shanghai. This foundation has 55.85% equity of Brilliance China, while the actual controller of brilliance is still Yangrong.

In October 1992, with the support of the foundation and the endorsement of the central bank, Brilliance China, with its people on the top, successfully listed in the United States. As the first share of socialist countries, it caused a huge sensation on Wall Street and in China, raising 80 million US dollars.

Warm tips, the original stock not only attracted investors, but also attracted cheaters. You and I are mortals, one has no money, two do not have the ability to do business, when the myth of the original stock of sudden wealth hit on the head, or to beware of being cheated.

To get to the point, with 46 million original shares, the golden cup really started a good start for Yangrongs automobile empire. In 1997, Yangrong was ready to create brilliance china brand, and its vehicle design invited Italian palace designer Giorgio to participate. The engine part directly bought Shenyang Aerospace Mitsubishi engine factory, and the product research and development cost 100 million yuan without saying a word.

At the end of 2000, the first generation of Zhonghua cars came off the production line. Yangrong publicly said: by 2006, the only Chinese automobile brand that dares to challenge foreign enterprises is brilliance china! This is not blind self-confidence. According to reports, Renault president Du Mai visited brilliances factory and said, the worlds revolution began in Paris, and the Chinese automobile revolution started from Yangrong.

Ideal is full and realistic. The car was built, but Brilliance China didnt get the vehicle sales qualification. He couldnt sell it! So the first cars were digested by the employees.

When BMW Brilliance meets, it will win countless people

But dont worry, cunning rabbit caves. While preparing for brilliances Chinese brand, brilliance has a way to go, namely, making pickup cards. As early as 1999, Yangrong married with the field car, which was formerly Baoding automobile factory, and gave birth to a child called ZTE.

In addition to ZTE, the biggest gift the field brings to brilliance is BMW! At that time, BMW was looking for a domestic partner, and it had several contacts with fieldwork.

And brilliance is through the field, and BMW colluded with. In 2001, brilliance and BMW formally began to contact each other. In October of the same year, brilliance BMW Automobile Co., Ltd. was established. At that time, the leader of BMW domestic project team was Yangrong.

Its a good thing to get married with BMW. BMW almost runs all the way with brilliance. In the past 10 years, BMW Brilliance has brought about an annual profit of 4 billion yuan for brilliance automobile.

At the same time, Yangrong has promoted the joint venture between Jinbei and GM through various operations, and has also taken over Sanjiang Renault in Xiaogan, Hubei Province, holding 55% of the shares, and plans to introduce Renault family economic cars.

So far, through various operations of Yangrong, brilliance Empire gradually emerged, with a market value of 24.6 billion, including 5 listed companies and 158 affiliated companies, which was called brilliance maze by the media at that time.

In 2001, the Muma big case broke out in Liaoning Province, involving many corruption cases of officials. The incident was later adapted into a TV series the river goes East. Interested friends can go and have a look.

This matter has a profound impact on the layout of Yangrong, and also made Yangrong decide not to develop only in Liaoning Province, but to extend its hand elsewhere. At that time, he took a fancy to Rover and planned to invest 7 billion yuan to let Rover land in Ningbo. However, brilliance automobile was born in Liaoning Province, and has become a pillar enterprise in Liaoning Province. How can it be easily uprooted?

In March 2002, Liaoning Province set up a working group to receive brilliance assets and began to comprehensively check, verify and receive brilliance assets. In June 2002, Brilliance China announced the dismissal of Yangrongs chairman of the board of directors and chief executive officer. The public security department also announced that Yangrong was arrested by the Liaoning Provincial procuratorate for suspected economic crimes.

Yangrong went to the United States in May 2002, and has never returned. But he didnt disappear, and in 2009 he started the road car, which is another story.

What is the future of brilliance, which has become a parasite after abandoning martial arts?

Brilliance group seems to have a big family and a big business, but it has and only BMW Brilliance can play. According to the financial report in 2019, BMW Brilliance contributes more than 95% to the companys revenue, profit and operating cash flow. However, brilliances independent brands such as Brilliance Jinbei and brilliance Zhonghua are just losing money without making any profit. If the profit share from BMW Brilliance is removed, the total loss of other sectors of Brilliance China in the first half of this year will reach 338 million yuan. Brilliance BMW explains with real gold and silver what is life belt can not move.

Relying on BMWs gold lettered signboard to win brilliance, slowly fell into the embarrassing situation. On the one hand, although BMW is outstanding, BMW Brilliance has become increasingly unable to control BMW. In 2018, Brilliance China signed an agreement with BMW, and BMWs equity in BMW Brilliance increased from 50% to 75%, with more absolute control and discourse power.

On the other hand, Chinas auto market has long passed the stage of making a big cake and entered the era of re dividing the cake. And the independent brand in the domestic car echelon of brilliance, obviously can not eat the cake. Under the influence of the epidemic situation, the data is even worse. Brilliance Chinas sales volume in the whole half year of 2020 is only 3186 units, which is not as good as that of any other independent brand manufacturers in a month.

Brilliance has been lying in peace and contentment all the way. A big reason is that it believes in the support of the government. Brilliance group, especially BMW Brilliance, affects the development and investment of the whole automobile industry chain in Shenyang and even Liaoning Province. It has more than 160 related companies and 47000 employees. The government cant watch 45000 people go home after being unemployed overnight.

The government did help, mainly by providing financial support to brilliance by taking over part of the equity of brilliance. On May 27, brilliance group sold 200 million shares of brilliance china equity to Liaoning Jiaotong Investment Co., Ltd., accounting for 3.96% of Brilliance Chinas equity; on July 14, Liaoning Jiaotou started another 400 million shares and obtained 7.93% of the total equity.

In recent years, there are not a few cases of Liaoning government trying to take over for weak enterprises. From northeast special steel to Huishan dairy, then to Dalian machine tool and Dandong Port Group, the government tried its best to help these big taxpayers tide over the difficulties.

With strong government support in a short period of time, brilliance may not collapse suddenly. But if we wait for death, who can guarantee that brilliance will never go bankrupt and restructure? The equity delivery for BMW to increase its shareholding in BMW Brilliance is planned to be completed before 2022. By then, BMW Brilliance will have less and less blood transfusion for brilliance groups own brand, and brilliance will have less confidence and chips in front of the government. You cant rely on the government. What about yourself? Unfortunately, the brutal market will not wait for a failed straggler. Looking back on the past, BMW has spent 17 years using brilliance to open up the Chinese market and firmly occupy the leading position in the market before regaining its rights. Two words, absolutely. Brilliance, on the other hand, relies too much on BMW and abandons its martial arts skills, resulting in no improvement in its own product line. However, Yangrong, who created the brilliance empire but was suddenly out of the game, made a mistake and lost all over the market. Whats more, its hard to let the listeners feel sorry. Source: hexun.com Author: Wang Zixu, editor in charge: Wang Xiaowu_ NF

With strong government support in a short period of time, brilliance may not collapse suddenly. But if we wait for death, who can guarantee that brilliance will never go bankrupt and restructure?

The equity delivery for BMW to increase its shareholding in BMW Brilliance is planned to be completed before 2022. By then, BMW Brilliance will have less and less blood transfusion for brilliance groups own brand, and brilliance will have less confidence and chips in front of the government.

You cant rely on the government. What about yourself? Unfortunately, the brutal market will not wait for a failed straggler.

Looking back on the past, BMW has spent 17 years using brilliance to open up the Chinese market and firmly occupy the leading position in the market before regaining its rights. Two words, absolutely.

Brilliance, on the other hand, relies too much on BMW and abandons its martial arts skills, resulting in no improvement in its own product line. However, Yangrong, who created the brilliance empire but was suddenly out of the game, made a mistake and lost all over the market. Whats more, its hard to let the listeners feel sorry.