Original title: Brilliance China’s official website shuts down service calls to change BMW China: Acquisition of some assets but not brands of Brilliance China Our reporter Gong Mengze After nearly ten months of bankruptcy and reorganization, Brilliance Group and BMW China finally reached a proposal recently: BMW China will acquire “Zhonghua” auto-related assets for 1.633 billion yuan. On the morning of August 31, this proposal was passed at the second creditors meeting (hereinafter referred to as the “Second Debt Meeting”) held in the substantive merger and reorganization of 12 companies including Brilliance Group. At the second bond meeting, there were three proposals, including two proposals for property management and price change, the establishment of a creditor committee, and the core proposal for BMW China to acquire related assets of “Zhonghua” automobile. It is reported that although all three bills were passed at the Second Debt Meeting. However, the passing rate of BMW China’s proposal to acquire “Zhonghua” cars is not high, and the agreed amount only accounts for 57% of the amount of debts attended the meeting, which is only slightly above the minimum limit of 50%. In fact, as a brand that once led the development of domestic vehicles, the acquisition of Brilliance Zhonghua continues to arouse heated discussions. In this regard, on September 1, the relevant person in charge of BMW China said in an interview with a reporter from the Securities Daily that the company has established a strong cooperative relationship with Brilliance Group in the past 18 years. “We hope to support Brilliance Group with practical actions. The reorganization of the company and the commitment to further expand the company’s business in Liaoning Province.” It is worth noting that what BMW acquired this time is not the Brilliance China brand, but some assets related to automobile production. According to the reporter’s understanding, the accurate statement of the BMW China proposal is: related to certain assets related to the production of the “Zhonghua” brand automobile and the equity acquisition plan of Brilliance Automobile Manufacturing Co., Ltd. Some assets of Brilliance China 1.633 billion yuan was acquired As early as May this year, BMW China, a wholly-owned subsidiary of the BMW Group, has officially expressed its intention to acquire. According to institutional creditors who did not want to be named, one week before the second bond meeting, the bankruptcy administrator visited creditors from Shenyang across the country, saying that he valued BMW’s acquisition plan and made a special trip to get the creditors’ consent. The purchase price of 1.633 billion yuan for BMW China is basically fair in the eyes of the outside world. According to public information, as of November 20, 2020, some assets related to the production of the “Zhonghua” automobile brand are 1.233 billion yuan, which is one of the main contents of BMW China’s acquisition of Brilliance China. “This acquisition is mainly related to production of some assets, including land, plant, equipment, etc., excluding production qualifications.” BMW China official said. Specifically, certain assets related to the production of the “Zhonghua” automobile brand 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 ; And the 100% equity of Brilliance Automobile Manufacturing Co., Ltd. held by Brilliance Group, due to the offset of assets and liabilities, the value is 4,500 yuan, totaling 1.233 billion yuan. And this also means that, in addition to the 1.233 billion yuan asset bid, BMW China’s 1.633 billion yuan price has a 400 million yuan premium. A large part of this 400 million yuan premium was actually used to pay for BMW China’s acquisition of 100% equity in Brilliance Automobile Manufacturing Co., Ltd. It is understood that the “Zhonghua” automobile brand is one of the three independent brands of Brilliance Automobile Group, and the other two are “Jinbei” and “Hua Song”. In addition, Brilliance Automotive Group also owns two joint venture brands, “BMW Brilliance” and “Brilliance Renault”. Today, independent auto brands such as “Jinbei” and “Zhonghua” have become marginalized. When combined with group operations, Brilliance Automotive Group appears to be huge, but its profits have mainly come from Brilliance China in recent years, while Brilliance China has mainly relied on blood transfusions from BMW Brilliance. Financial report data shows that from 2015 to 2019, BMW Brilliance’s net profit for Brilliance China was 3.823 billion yuan, 3.993 billion yuan, 5.233 billion yuan, 6.245 billion yuan and 7.626 billion yuan. Brilliance Group is hard to return Debt servicing pressure is high Although BMW China has given financial support to Brilliance Group through the acquisition, the current debt repayment pressure of Brilliance Group is still “heavy.” Its total debt of 24.58 billion yuan has reached 2.5 times its assets. As early as October 2020, Brilliance Automobile Group Holdings Limited’s remaining bond “17 Huaqi 05” had a substantial default. This was also the first time that Brilliance Group defaulted on the public debt market. On November 20 of the same year, the Shenyang Intermediate People’s Court ruled to accept the creditor’s application for reorganization of Brilliance Automobile Group Holdings Co., Ltd., marking that this auto company has officially entered the bankruptcy reorganization process. “Securities Daily” reporters consulted the information released by the Second Bonds Association and showed that as of August 13, 2021, a total of 6,005 creditors had declared their claims to the administrator, with the amount of declared claims amounting to approximately 54.313 billion yuan. The administrator was initially determined after review and deferred. The amount of claims is about 49.983 billion yuan. In addition, after investigation, it is estimated that employee claims and undeclared claims are about 12.001 billion yuan. Therefore, the total estimated debt of 12 companies including Brilliance Group is 61.984 billion yuan. The reporter observed that Brilliance China is currently in a state of shutdown. Not only did its products have not been scheduled for nearly a year, but its terminal sales also continued to be zero for 8 months. At the same time, after-sales problems for owners of sold vehicles also need to be resolved. In addition, a reporter from “Securities Daily” found that the official website of Brilliance China-China Brand could no longer be opened. However, after jumping to the Brilliance China website from the official website of Brilliance Automobile Group, the three products Zhonghua V7, V6, and V3 displayed on the homepage cannot be linked to the webpage; the reporter dialed the hotline of Brilliance China Customer Service Center, and the message prompts after the call is connected: “Welcome to call Brilliance Renault Golden Cup. From now on, the 24-hour hotline of the Chinese brand has been changed.” In this regard, a relevant person in charge of BMW China who did not want to be named said: “We hope to support the reorganization of Brilliance Group with practical actions. We hope to use the existing production capacity of Brilliance Automobile Manufacturing Co., Ltd. However, the project is still under the management of relevant departments. During the approval process, no detailed information can be provided at this time.” .
