Recently, the National Enterprise Bankruptcy and Reorganization Case Information Network announced that Gezhi Automotive Technology Co., Ltd. (hereinafter referred to as Gezhi Technology) applied to the Shenyang Intermediate People’s Court of Liaoning Province to reorganize Brilliance Automotive Group Holdings Co., Ltd., the case number is (2020) Liaoning

01 Po Shen No. 27.

? The shareholders of Brilliance Group are the State-owned Assets Supervision and Administration Commission of the Liaoning Provincial Government and the Liaoning Provincial Social Security Fund Council (Provincial Industrial (Entrepreneurship) Investment Guidance Fund Management Center), which hold 80% and 20% of the shares respectively.

According to the bond rating report issued by Oriental Jincheng, as of the end of 2019, Brilliance Group has 34 first- and second-level subsidiaries, including 4 listed companies, namely Jinbei Automobile, Shenhua Holdings, and Hong Kong stock companies Xinchen Power and BRILLIANCE CHI

(Brilliance China Automotive Holdings Co., Ltd.).

? Brilliance Group announced that it is still uncertain whether the application will be accepted by the court.

But for Brilliance Group, which is deeply in debt crisis, entering the reorganization process may be the best and effective way to solve the problem.

Behind the debt crisis of Brilliance Auto lies the unspeakable dilemma of its main automobile business, with independent brands and joint venture brands showing polarized development.

Brilliance Group's performance has long been mainly supported by its joint venture BMW Brilliance. Its independent brands have suffered serious losses and operating performance has continued to decline.

The debt risks currently faced are due to factors such as the outbreak of the new crown epidemic this year and the overall market downturn in the automobile industry. It is also related to the company's long-term dispersed foreign investment, weak product research and development foundation, and poor management of its own operations.

It is reported that many of the company's independent brands have been in a state of suspension or semi-discontinuation in recent years. The independent brands only produce two products, Zhonghua V3 and V7, but sales are sluggish.

Brilliance Automobile's 2020 bond semi-annual report shows that the group's total liabilities are 132.844 billion yuan. After deducting goodwill and intangible assets, the asset-liability ratio is 71.4%, and the balance of cash and cash equivalents at the end of the period is 32.677 billion yuan.

In addition, Brilliance China's semi-annual report shows that in the first half of 2020, Brilliance China's revenue was 1.45 billion yuan and net profit was 4.025 billion yuan.

However, if the net profit of 4.383 billion yuan contributed by BMW Brilliance is excluded, it means that Brilliance China lost more than 340 million yuan in the first half of the year.