AutoBeta(AutoBeta.net)11/21 Report--

On the same day that the information confirmed the formal bankruptcy and reorganization of brilliance Group, the Securities Regulatory Commission also decided to file a case for investigation.

On November 20, the Securities Regulatory Commission issued a notice saying that the recent default of brilliance Group's bonds has aroused market concern, and the Securities Regulatory Commission has carried out a special inspection on it in accordance with the law. According to the inspection, today, it took administrative supervision measures to issue a warning letter to brilliance Group and decided to file a case for its suspected illegal and illegal information disclosure, and synchronously checked the intermediaries involved in brilliance Group's bonds. Seriously investigate and deal with relevant violations of laws and regulations.

On the same day, brilliance Group officially went bankrupt and reorganized.

The Shenyang Intermediate people's Court ruled on the 20th to accept creditors' application for the restructuring of brilliance Automobile Group Holdings Co., Ltd., which also means that the independent car company has officially entered the bankruptcy reorganization process. The ruling shows that brilliance Group has the situation that its assets are insufficient to pay off all its debts, and it has the bankruptcy reasons stipulated in the enterprise bankruptcy law, but at the same time, the group has the value and possibility of rescue, and the necessity and feasibility of reorganization.

Brilliance Group is a large vehicle manufacturing enterprise controlled by Liaoning SASAC. Liaoning SASAC holds 80% of the shares, and the social security fund holds 20%. The main business income is vehicle manufacturing. For brilliance Group to enter the bankruptcy reorganization process, Liaoning Province SASAC responsible person said that brilliance Group long-term poor management, its own brand has been in a state of loss, debt ratio remains high. Since 2018, the Liaoning provincial government and relevant departments have been trying to help brilliance solve its cash flow problem, but its debt problem is not easy to solve over a long period of time.

Brilliance Group directly or indirectly controls and participates in four listed companies, and through its listed company brilliance China and BMW jointly established brilliance BMW. Brilliance Group has three independent brands of China, Golden Cup and Huasong and two joint venture brands of brilliance BMW and Huachen Renault.

The person in charge of brilliance Group said that this restructuring only involves the independent brand section of the group headquarters, not the listed companies of the group and the joint ventures with BMW and Renault. As BMW's most important partner in China, the group is expected to be reborn after restructuring and try its best to recover creditors' losses. At the same time, brilliance BMW remains a stable source of profit in the future, and will continue to launch new products and expand its scale.

Brilliance Group relies too much on the profits of brilliance BMW and continues to lose money in its own business. Other businesses such as brilliance China's own brands lost 864 million yuan in 2019 and 340 million yuan in the first half of 2020.

Earlier, brilliance Group confirmed in an announcement that the private bond "17 Huaqi 05" with a scale of 1 billion yuan could not be paid on schedule. On November 16th, brilliance announced that it had defaulted on its debts totaling 6.5 billion yuan and overdue interest totaling 144 million yuan. 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. Brilliance's news of the bond default soon caught the market's attention.

The market has entered the stage of survival of the fittest, vulnerable car companies will be eliminated. In addition to brilliance Group, Zhongtai and Lifan have also entered the bankruptcy reorganization process.

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