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Brilliance Automobile Group, which fell into bankruptcy reorganization due to debt problems, has become another independent automobile manufacturing enterprise that has poor management and embarked on the road of reorganization. Recently, brilliance Automobile Group said that it had defaulted on its debt of 6.5 billion yuan, and the company was unable to repay it due to lack of funds.

Brilliance Automobile Group Holdings Co., Ltd. announced that brilliance has defaulted on its debt totaling 6.5 billion yuan and overdue interest totaling 144 million yuan, according to the Financial Associated Press. Due to the shortage of funds in the enterprise, the examination and approval of the renewal credit has not been completed, resulting in non-repayment.

At the same time, the debt default of brilliance Group has an impact on the production and operation of brilliance Group headquarters, resulting in the deterioration of the financial situation and greatly affecting the solvency of brilliance Group.

On November 13 this year, the National Enterprise bankruptcy reorganization Information Network disclosed that brilliance Automobile Group Holdings Co., Ltd. was applied for bankruptcy reorganization by creditors, and the applicant was Gezhi Automotive Technology Co., Ltd. the case number is (2020) Liao 01 Breaking Shen 27. Gezhi Automotive Technology Co., Ltd. is an automotive stamping die developer, engaged in automotive stamping die design, research and development, manufacturing and sales.

According to official data, brilliance Automobile Group holding Co., Ltd. is a key state-owned enterprise under the Liaoning Provincial State-owned assets Supervision and Administration Commission, with its headquarters located in Shenyang, Liaoning Province. At present, brilliance has six vehicle manufacturers, two engine manufacturers and a number of spare parts manufacturers in Liaoning, Sichuan and Chongqing, and has four listed companies (brilliance China Automobile Holdings Co., Ltd., Shanghai Shenhua holding Co., Ltd., Jinbei Automobile Co., Ltd., Xinchen China Power Holdings Co., Ltd.). The existing staff of 47000 people, total assets of more than 190 billion yuan. The company has three independent brands of "China", "Golden Cup" and "Huasong" and two joint venture brands of "brilliance BMW" and "brilliance Renault". The products cover the field of passenger vehicles and commercial vehicles.

Brilliance China's performance report for the first half of 2020 shows that its revenue is 1.45 billion yuan, but its net profit is as high as 4.045 billion yuan. Excluding the net profit of 4.383 billion yuan contributed by BMW brilliance, brilliance China will lose 338 million yuan. It means that brilliance China mainly relies on brilliance BMW's "blood transfusion" to achieve large profits. In 2019, brilliance BMW contributed 7.626 billion yuan to brilliance China's profit, while brilliance China's independent business lost 864 million yuan.

Statistics show that brilliance's independent business has been losing money in recent years, losing 540 million yuan, 600 million yuan, 860 million yuan, 420 million yuan and 1.064 billion yuan respectively from 2015 to 2019, with a total loss of nearly 3.5 billion yuan. In contrast, BMW brilliance, a joint venture brand, has contributed 3.923 billion yuan, 3.993 billion yuan, 5.233 billion yuan, 6.245 billion yuan and 7.626 billion yuan to brilliance in the past five years, with a cumulative profit of 26.9 billion yuan.

It is worth noting that the days of brilliance lying down to make money are coming to an end. According to the agreement reached between brilliance and BMW, brilliance transferred 25 per cent of brilliance BMW to the BMW Group for 3.6 billion euros and extended the term of the joint venture until 2040. At that time, BMW and brilliance will own 75% and 25% of brilliance respectively, while brilliance BMW will no longer be included in the brilliance merger.

Brilliance Automobile Group, which is heavily in debt and its independent business is stagnant, where to go?

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