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alone! Hundreds of billions of state-owned companies confirmed default: 6.5 billion in debt and 144 million in interest cannot be repaid! 4 listed companies
Tang wei
In late fall, many locations will usher in a “cliff-style” cooldown. Even colder, or the heart of countless creditors of the head of the state-owned Shenyang Brilliance Automobile Group, announced today that it officially confirmed the default of 6.5 billion yuan in debt.
On the night of November 16, Brilliance Automobile Group Holdings Co., Ltd. announced that currently, Brilliance Group has constituted a debt default amount of 6.5 billion yuan and a total amount of past due interest of 144 million yuan. yuan. Due to a shortage of corporate funds, the renewal credit approval has not been completed, leading to non-payment. Brilliance Group’s default on debt has affected the production and operation of the Brilliance Group headquarters, causing deterioration in financial conditions and greatly affecting solvency.
Brilliance Automobile Group is a key state-owned company affiliated with the Liaoning Province State-Owned Assets Supervision and Management Commission, with assets close to 200 billion yuan. Currently, it owns 4 listed companies namely Brilliance China (01114.HK),Jinbei AutomobileCo., Ltd. (600609.SH), ShanghaiShenhua HoldingsCorporation Limited (600653.SH) andChina PowerHoldings Limited (01148.HK).
As of October this year, Brilliance Automotive Group has issued 34 bonds and 14 bonds remaining, with a total outstanding bond balance of 16.2 billion yuan. Among them, the scale of bonds maturing in 1-3 years exceeds 10 billion yuan.
Brilliance Automotive Group has 100 billion debts
Recently, news of a supplier filing for bankruptcy and reorganization fully revealed Brilliance Automotive Group’s dilemma.
On November 13, the National Company Bankruptcy Reorganization Case Information Network published that Gezhi Automotive Technology applied to the Liaoning Province Shenyang Intermediate People’s Court for the reorganization of Brilliance Automobile Group Holdings Co., Ltd. The number of case is (2020) Liao 01 Po Shen 27.
On November 15, Brilliance Automobile Group released an announcement that it is not yet known whether the request can be ruled by the court.
In fact, as early as August of this year, many of Brilliance Auto Group’s remaining bonds plunged. In October this year, Brilliance Automotive Group again fell into a whirlwind of public opinion as it failed to redeem 1 billion yuan private placement bonds on time. On November 4, Brilliance Automobile Group stated that although it has worked hard to raise funds, due to financing difficulties, it can only redeem the interest on the bond. Not only that, Brilliance Automobile Group has a record of 19 times it failed to meet its legal obligations on time and was enforced 19 times this year, also virtually confirming Brilliance Automobile’s plight.
For this reason, Brilliance Automotive Group has repeatedly sold its shares to ease financial pressure. In May this year, Brilliance Automobile Group signed a strategic investment agreement with Liaoning Transportation Construction Investment Group Co., Ltd. and its subsidiary Liaoning Transportation Investment Co., Ltd. (hereinafter “Liaoning Trading”), which will sell 200 million US dollars per share. Brilliance China shares are traded in Liaoning, which represents 3.96% of Brilliance China’s share capital. On July 9, Brilliance Automotive Group and Liaoning Trading signed a strategic investment agreement to sell you 400 million shares of the company, which represents approximately 7.93% of the company’s total issued share capital.
But these are just a drop in the bucket. According to Brilliance Auto Group’s 2020 semi-annual bond report, the group’s total liability is 132.844 billion yuan. After deducting goodwill and intangible assets, the debt / asset ratio is 71.4%. The balance of cash and cash equivalents at the end of the period was 32,677 million yuan.
Around October 23, Dagong International and Orient Jincheng lowered Brilliance’s main credit rating to negative (BB and BBB respectively), but in fact, from September this year to before the bond default, Dongfang Jincheng has done four consecutive times. Lower Brilliance’s credit rating.
Brilliance BMW can’t bring with a strong son and a weak mother
According to Brilliance Auto Group’s official website, Brilliance Auto Group is a key state-owned company affiliated with the Liaoning Province State-Owned Assets Supervision and Management Commission and the main force in China’s auto industry. It has three independent brands: “Zhonghua”, “Jinbei” and “Hua Song” and The two main joint venture brands of BMW Brilliance and Renault Brilliance cover all areas of passenger cars and commercial vehicles.
At the end of March 2020, the company had a registered capital of 8 million yuan. Liaoning Province State Owned Assets Supervision and Administration Commission and Liaoning Province Social Security Fund Council own 80.00% and 20.00% respectively. The actual controller is the Liaoning Province State Owned Assets Supervision and Administration Commission. As of the end of 2019, Brilliance Auto has 34 primary and secondary subsidiaries, including four publicly traded companies.
Although it sounds like a big deal, in recent years it is an indisputable fact that Brilliance Automotive Group relies primarily on blood transfusions from BMW Brilliance. In 2003, BMW and Brilliance Automobile Group jointly established BMW Brilliance. At that time, Brilliance Automobile Group had a 40.5% stake in the joint venture through Shenyang Jinbei. After several capital changes, each party had a 50% stake in the joint venture.
If there is feedback from BMW Brilliance, the Brilliance Group can basically maintain stable operations, but the situation has changed in 2018. On October 11, 2018, BMW Brilliance started the first attempt. Both Brilliance and BMW announced that they intend to sell a 25% stake in BMW Brilliance to the BMW Group by 2022 at a transaction price of 29 billion yuan.
At present, the capital adjustment of BMW Brilliance has entered the countdown. Before 2022, BMW will acquire a 25% stake in BMW Brilliance from Brilliance Auto. At that time, BMW and Brilliance Auto will own 75% and 25% of BMW Brilliance respectively, and will no longer be included in the scope of the Brilliance Auto merger.
According to people familiar with the matter, after BMW announced an increase in BMW Brilliance’s stake ratio, Brilliance Auto’s own financial and performance situation became troubled by the outside world, affecting attitudes of suppliers and upstream and downstream partners to Brilliance Auto, which in turn triggered a series of crises. .
How deeply dependent it is now on BMW Brilliance, Brilliance China’s performance will be hit hard two years later.
Currently, the Liaoning provincial government is considering the judicial reorganization of Brilliance Auto to solve its debt problem. For BMW, it won’t sit idly by, after all, the equity shift is still over a year away. After giving his 50 billion yuan BMW Brilliance BMW parts order in July this year, another 20 BMW experts were transferred from Germany to settle in August to help him improve his business level.
It is worth mentioning that BMW has performed well. The recently announced third quarter financial report showed that in the third quarter of this year, the BMW Group had revenues of € 26.28 billion, a profit before tax of € 2.46 billion and a net profit of approximately € 1.82 billion. euros, a year-on-year increase of 17.4%. In the third quarter, BMW Brilliance sold 181,000 vehicles in China, an increase of 35.2% year-on-year, becoming the main force for growth.
Two companies listed on A shares were affected
On November 16, Shenhua Holdings and Jinbei Automobile posted casualties. At the close, Jinbei Automobile fell 7.13% and Shenhua Holdings rebounded to close 1.06% higher.
On the evening of November 15, Shenhua Holdings and Jinbei Automobile announced successively that the company’s indirect controlling shareholder, Brilliance Group, received a notice from the Shenyang Intermediate Court on November 13 that Brilliance Group’s creditor, Zhi Technology , requested the reorganization of Brilliance Group. If you enter the reorganization process, it may have some impact on the equity structure of the company and other aspects.
Jinbei Automobile announced that after verification, as of the date of this announcement, the company’s accounts receivable to Brilliance Group were RMB 50.07 million and the company’s accounts receivable to Brilliance Renault Jinbei Automobile Co., Ltd. were RMB 26.77 million, both made up of buying and selling auto parts every day. If Brilliance Group goes bankrupt and reorganizes, the company can make a large provision for bad debts. The balance of the guarantees provided by the company to Brilliance Group and its related parties is 530 million yuan. If Brilliance Group goes bankrupt and reorganizes, it is uncertain whether the relevant collaterals can be successfully released.
As of the date of this announcement, a wholly owned subsidiary of Brilliance Group owns approximately 266 million shares of Jinbei Auto, representing 20.32% of the company’s total share capital, of which 100 million shares are used. for margin trading, which represents 37.53% of the company’s total shares. 73.6 million shares are in a state of judicial freezing, which represents 27.63% of the total shares of the company it owns.
Shenhua Holdings announced that after verification, as of the date of this announcement, the company’s accounts receivable from Brilliance Group and its related parties were 140 million yuan, mainly due to the daily buying and selling of cars; the balance of the guarantee provided by the company to Brilliance Group and its related parties was 44565.48 Yuan, of which 400 million yuan is the counter-guarantee provided by the company to the Brilliance Group financing guarantee for the company, and 45.654 million Yuan Yuan is the guarantee of survival provided by the company to the Brilliance Leasing atomic company. If Brilliance Group enters the reorganization process, it may have some impact on the annual performance of the company.
As of the date of this announcement, Brilliance Group directly and indirectly owns approximately 446 million shares of Shenhua Holdings, representing 22.93% of the company’s total share capital. The number of shares frozen is approximately 108 million shares, which represents 24.13% of its total stake. It represents 5.53% of the total share capital of the company.
In Hong Kong stocks, Brilliance China (01114.HK) closed down 5.18% on the 16th, with a total market value of HK $ 35,064.6 million.
China Dynamics Holdings (01148.HK) closed 4.17% lower on the 16th, with a total market value of HK $ 529 million.
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Editor in charge: Chen Zhijie
