According to the courts ruling, brilliance groups assets are insufficient to pay off all its debts, and it has the cause of bankruptcy stipulated in the enterprise bankruptcy law. But at the same time, the group has the value and possibility of rescue, so it is necessary and feasible to restructure.
According to brilliance autos bond semi annual report in 2020, the groups total debt is 132.844 billion yuan. According to wind data, as of October this year, brilliance auto has issued 34 bonds and 14 bonds, with a total balance of 16.2 billion yuan. From the perspective of maturity distribution, the maturity and resale pressure of brilliance automobile is concentrated in 2021 and 2022. The maturity and resale scale of bonds are 6.5 billion yuan and 9.2 billion yuan respectively, involving 4 and 8 bonds respectively.
The relevant person in charge of brilliance group said that the restructuring only involved the groups own brand plate, not the groups listed companies and joint ventures with BMW and Renault. As the most important partner of BMW in China, the group is expected to achieve rebirth after restructuring and try its best to recover the losses of creditors. At the same time, BMW Brilliance is still a stable source of profits in the future, and will continue to launch new products and expand the scale.
Brilliance group enters bankruptcy reorganization procedure
As a state-owned enterprise in Liaoning Province, brilliance group directly or indirectly controls and shares in four listed companies, and through its listed company Brilliance China and BMW jointly established brilliance BMW company. There are three independent brands of Zhonghua, Jinbei and Huasong, and two joint venture brands of brilliance BMW and brilliance Renault.
In late October, the 1 billion yuan private placement bonds issued by brilliance group only paid interest when they were due, but the principal failed to be paid, which caused concern.
On November 16, Brilliance Automotive Group Holdings Co., Ltd. (hereinafter referred to as brilliance group) announced that at present, brilliance group has constituted a debt default amount of 6.5 billion yuan and overdue interest amount of 144 million yuan. As for the debt crisis that has continued so far, brilliance group explained that due to the shortage of enterprise funds, the approval of extension credit was not completed, resulting in the inability to repay. This debt default has an impact on the production and operation of the headquarters of brilliance group, leading to the deterioration of the financial situation and greatly affecting the solvency.
According to the relevant person in charge of the state owned assets supervision and Administration Commission of Liaoning Province, brilliance group has been operating poorly for a long time, its own brand has been in a state of loss, and the debt ratio remains high. Since 2018, Liaoning provincial government and relevant departments have been trying to help brilliance group solve the cash flow problem, but its debt problem is too heavy to return.
According to the law, Shenyang intermediate peoples court will appoint the administrator of brilliance group to be fully responsible for all work during the period of enterprise bankruptcy and reorganization, including accepting and confirming the creditors claim declaration, preparing the draft reorganization plan and submitting it to the creditors meeting for voting. The final reorganization will be approved by the court in accordance with the plan.
It does not involve joint ventures such as BMW
BMW Brilliance has always been the dependence of brilliance system.
It is worth noting that after the default of brilliance group, the characteristics of strong son and weak mother of brilliance group has attracted market attention.
BMW said in 2018 that it would acquire 25% of the shares of BMW Brilliance at a price of 3.6 billion euros (about US $4.2 billion) in 2022, increasing the shareholding ratio from the existing 50% to 75% in order to gain control of BMW Brilliance. After the acquisition of BMW Brilliance, BMW and brilliance will no longer own 25% of the shares of BMW and brilliance, respectively.
According to the previous analysis of PENGYUAN credit, as brilliance group is very dependent on BMW Brilliance, after the completion of the delivery in 2022, brilliance auto will completely lose the brand of BMW Brilliance, which will have a great impact on the companys future operation. Affected by negative events such as equity transfer, losses of the parent company and other systems of the group, and frequent rumors of fund shortage, financial institutions fled one after another. From the perspective of merger, the net cash outflow from financing activities in 2019 and the first half of 2020 was RMB 4.722 billion and RMB 5.442 billion respectively; the credit line of banks to the company also continued to decline, with banks at the end of 2018, 2019 and the end of March 2020 The total amount of credit was 37.529 billion yuan, 34.947 billion yuan and 32.565 billion yuan respectively. By the end of March 2020, the used credit line was 30.197 billion yuan, and the unused credit line was only 2.368 billion yuan. The refinancing ability of the company was impacted, and the cash flow pressure of the company was further enlarged.
Trading limits of several companies
Stimulated by the news of the bankruptcy and reorganization of brilliance group, Brilliance China rose in the short-term, with the increase expanded to nearly 10%. A-share Shenhua holdings and Jinbei Motor Co., Ltd. were trading.
On the evening of November 15, Shenhua holdings and Jinbei Automobile announced one after another. Brilliance group, the indirect controlling shareholder of the company, received the notice served by Shenyang Intermediate Court on November 13, and Gezhi technology, the creditor of brilliance group, applied for restructuring of brilliance group. If it enters the reorganization procedure, it may have certain influence on the companys ownership structure and other aspects.
Shenhua holding announced that as of the announcement date, the companys receivables from brilliance group and its related parties amounted to 140 million yuan, mainly due to daily automobile purchase and sales; the companys guarantee balance for brilliance group and its related parties was 445654800 yuan, of which 400 million yuan was the counter guarantee provided by the company to Huachen group for the companys financing guarantee, and 45.6548 million yuan was for the companys atomic company brilliance The surviving guarantee provided by the lease. If brilliance group enters the reorganization process, it may have a certain impact on the companys annual performance.
As of the announcement date, brilliance group directly and indirectly held about 446 million shares of Shenhua holding shares, accounting for 22.93% of the total share capital of the company. The number of shares in the frozen state was about 108 million shares, accounting for 24.13% of its total shares and 5.53% of the total share capital of the company.
Jinbei Automobile announced that, after verification, as of the announcement date, the companys accounts receivable from brilliance group were RMB 50.07 million and RMB 26.77 million from brilliance Renault Jinbei Automobile Co., Ltd., which were formed by the daily purchase and sale of auto parts. If brilliance group goes bankrupt and reorganizes, the company may draw large amount of bad debt reserves. If the reorganization of brilliance group is uncertain, whether the related parties of brilliance group can provide guarantee of RMB 30.5 billion. As of the announcement date, the wholly-owned subsidiary of brilliance group held 266 million shares of Jinbei Automobile, accounting for 20.32% of the total share capital of the company, of which 100 million shares were used for margin trading, accounting for 37.53% of the total shares of the company. 73.6 million shares were in judicial freeze state, accounting for 27.63% of the total shares of the company. This article is from securities companies in China. Author: Geng Yin, editor in charge: Zhong Qiming_ NF5619
Jinbei Automobile announced that, after verification, as of the announcement date, the companys accounts receivable from brilliance group were RMB 50.07 million and RMB 26.77 million from brilliance Renault Jinbei Automobile Co., Ltd., which were formed by the daily purchase and sale of auto parts. If brilliance group goes bankrupt and reorganizes, the company may draw large amount of bad debt reserves. If the reorganization of brilliance group is uncertain, whether the related parties of brilliance group can provide guarantee of RMB 30.5 billion.
As of the announcement date, the wholly-owned subsidiary of brilliance group held 266 million shares of Jinbei Automobile, accounting for 20.32% of the total share capital of the company, of which 100 million shares were used for margin trading, accounting for 37.53% of the total shares of the company. 73.6 million shares were in judicial freeze state, accounting for 27.63% of the total shares of the company.