The Shenyang Intermediate People’s Court ruled on November 20 to accept the creditor’s reorganization application against Brilliance Group, marking that Brilliance Group has officially entered the bankruptcy reorganization process. The court ruled that Brilliance Group's assets were insufficient to pay off all debts, and it had the reasons for bankruptcy stipulated in the Enterprise Bankruptcy Law; but at the same time, the group had the value and possibility of rescue, and the necessity and feasibility of reorganization.
In October this year, Brilliance Group failed to pay the principal and interest of its corporate bond 17 Huaqi 05 on time, and the iceberg of its debt problem gradually emerged; on November 13, Gezhi Automotive Technology Co., Ltd. officially submitted Brilliance Group's application for bankruptcy reorganization.
In this regard, Cui Dongshu, secretary-general of the National Passenger Transport Association, said that there are three main reasons why Brilliance Group has reached the stage of bankruptcy and reorganization. On the one hand, it is due to the change of leaders. The old and new leaders have different ideas, which also determines the different directions of the company's development; second, it is because the original model of Brilliance Group is difficult to develop at present. After the backlog of problems, the company It is also facing certain adjustments; thirdly, changes in equity have brought uncertainty, making the company's financing more difficult. ? Cui Dongshu said.
Shen Meng, executive director of Chanson Capital, also said that Brilliance Group, as a state-owned enterprise in Liaoning Province, has had many battles for control. In the end, the state-owned assets won, but it also led to the gradual formation of shortcomings of poor management of state-owned enterprises. . Brilliance Group's long-term dependence on BMW Brilliance for its performance has also concealed the reality of serious losses in other businesses, resulting in delays in corporate reform.
According to legal provisions, the Shenyang Intermediate People's Court will appoint the administrator of Brilliance Group, who will be fully responsible for all work during the company's bankruptcy and reorganization, including accepting and identifying creditor claims, preparing a draft reorganization plan and submitting it to the creditors' meeting. Voting etc.
After the bankruptcy and reorganization procedures are accepted, Brilliance Group should raise funds or find investors to cooperate with the implementation of the reorganization plan. If the reorganization is successful, creditors will be paid according to a reorganization plan that is ultimately approved by the court.
The relevant person in charge of Brilliance Group stated that this reorganization only involves the group’s own brand segment, and does not involve the group’s listed companies and joint ventures with BMW, Renault, etc. As BMW's most important partner in China, the group is expected to achieve rebirth after reorganization and do its best to recover the losses of creditors. At the same time, BMW Brilliance will still be its stable source of profits in the future, and it will continue to launch new products and expand its scale.
As for the direction of Brilliance Group's reorganization, Cui Dongshu believes that it is mainly debt restructuring, and the core is to reduce corporate pressure through debt-for-equity swaps and other methods. The weakness of independent brands has always been a label of Brilliance Group. Shen Meng has reservations about whether Brilliance Group can make breakthroughs in independent capabilities after its reorganization. Independent brands have always been a shortcoming of domestic car companies. There are no independent brands that can compete with first-tier foreign brands. Brilliance Group is not an isolated case. Currently, Brilliance is facing debt restructuring. The possibility of expanding its own brand is not only very small, but it is more likely to highlight the contribution of BMW Brilliance. ?Shen Meng said.
The most likely way to restructure is to introduce large strategic investors to inject capital and export management. However, new energy vehicles are currently far more popular than traditional fuel vehicles, and life is not easy for traditional car companies themselves. Therefore, Finding the right strategic investor is not easy.
Brilliance China stated that the court ruled to accept Gezhi Automobile’s application for reorganization of its controlling shareholder Brilliance. As of the date of this announcement, the company's business is operating as usual. The company will continue to pay close attention to the progress of the above-mentioned events and timely fulfill its information disclosure obligations under the Listing Rules and the Securities and Futures Ordinance.