Auto & Transportation

On August 31, there were reports in China that the second creditors meeting was held for the substantial merger and reorganization of 12 companies including Brilliance Group. The meeting reviewed three items including property management and price change plans, establishment of a creditor committee, and BMW China’s acquisition of the "Zhonghua" brand. Major motions. Voted by creditors, all three bills were passed.

In response to this high-profile acquisition, BMW China responded to Jiemian News, “With the strong support of the Liaoning Province and Shenyang Municipal Government, the BMW Group has established a strong cooperative relationship with Brilliance Group in the past 18 years. For BMW In general, Liaoning Province and Shenyang City have become China's key innovation and production bases, and they are also the cornerstone of our future success in China.

We hope to support the reorganization of Brilliance Group with practical actions and are committed to further expanding our business in Liaoning Province. We hope to use the existing production capacity of Brilliance Automotive Manufacturing Co., Ltd. However, the project is still in the approval process of the relevant departments. Please understand that we are currently unable to provide detailed information, more information will be released later. "

BMW China specifically stated that "the full name of the company to be acquired is Brilliance Automotive Manufacturing Co., Ltd.".

On November 20, 2020, the Shenyang Intermediate People's Court ruled to accept creditors' application for reorganization of Brilliance Automobile Group Holdings Co., Ltd., which means that this auto company has officially entered the bankruptcy reorganization process.

The court's ruling stated that the assets of Brilliance Group were insufficient to pay off all its debts, and that it had bankruptcy reasons stipulated in the Corporate Bankruptcy Law. But at the same time, the group has the value and possibility of salvation, and the necessity and feasibility of reorganization.

According to the announcement issued by Brilliance Group at that time, the group has constituted a total debt default amount of 6.5 billion yuan and a total overdue interest amount of 144 million yuan.

Brilliance Group is a state-owned enterprise in Liaoning Province. It established BMW Brilliance as a joint venture through its listed company Brilliance China and BMW Group. It owns three independent brands of Zhonghua, Jinbei, and Huasong, and two joint venture brands of BMW Brilliance and Renault Brilliance.

After the initiation of the bankruptcy proceedings, the relevant person in charge of the Brilliance Group specifically stated that this reorganization only involves the group's own brand sector, and does not involve the group's listed companies and joint ventures with BMW and Renault.

According to an introduction by the manager of Brilliance Group at the second creditors meeting today, as of August 13, 2021, a total of 6,005 creditors have declared their claims to the manager, and the amount of the declared claims is approximately 54.313 billion yuan. The manager has initially determined after review and The amount of deferred claims is about 49.983 billion yuan. After investigation, it is estimated that employee claims and undeclared claims are about 12.001 billion yuan, and the total estimated debt of 12 companies including Brilliance Group is 61.984 billion yuan, and the total amount of liabilities is about 2.5 times the estimated market value of the assets.

In the process of acquiring Brilliance Automobile Manufacturing Co., Ltd., a total of 3 companies with intention to participate, in addition to BMW China, there is also an investment institution and a company.

The relevant assets of Brilliance Automobile Manufacturing Co., Ltd. include 3 land use rights, valued at 240 million yuan; 19 buildings and 20 structures, valued at 700 million yuan; 179 machinery and equipment, valued at 293 million yuan; Brilliance Group holds Brilliance 100% equity of Automobile Manufacturing Co., Ltd., valued at 4,500 yuan, totaling 1.233 billion yuan.

Adding 400 million yuan for vehicle production qualifications, the total purchase price is 1.633 billion yuan.

According to Tianyancha APP information, Brilliance Automobile Manufacturing Co., Ltd. was established on December 14, 2019, with a registered capital of 20 million yuan, and the legal representative is Zhang Guosheng.

On March 31 this year, Brilliance China announced that it will postpone the release of its 2020 performance report. From 2015 to 2019, BMW Brilliance's net profit contribution to Brilliance China was 3.823 billion yuan, 3.993 billion yuan, 5.233 billion yuan, 6.245 billion yuan and 7.626 billion yuan.

In the first half of 2020, Brilliance China's revenue was 1.45 billion yuan and its net profit was 4.045 billion yuan. Among them, BMW Brilliance's net profit was 4.383 billion yuan, and it continued to provide blood transfusions to Brilliance China. After deducting the profit share from BMW Brilliance, Brilliance China's loss reached 340 million yuan.

If the acquisition is successful, the "Zhonghua" brand will disappear completely, and the assets of Brilliance Automobile Manufacturing Co., Ltd. will be used to produce related BMW models.

On December 16, 2000, the first generation of China Motor officially rolled off the assembly line in Shenyang. On January 9, 2003, the 10,000th Zhonghua Motor rolled off the assembly line. On July 8, 2010, the 500,000th Zhonghua Motor rolled off the assembly line.

The "Zhonghua" brand has two series of more than ten models of cars and SUVs. Among them, the V7, V5, Zunchi and Junjie models have delivered good sales answers in the Chinese market.