AutoBeta(AutoBeta.net)01/09 Report--

Recently, FAW Xiali announced that the company plans to change its name from "Tianjin FAW Xiali Automobile Co., Ltd." to "China Railway Materials Co., Ltd.", and the securities abbreviation will also be changed to "China Iron objects" accordingly. The business scope has been changed from "manufacture and after-sales service of cars, automobile engines, auto parts and internal combustion engine parts" to "railway transport infrastructure equipment sales, rail processing, high-speed rail equipment, accessories manufacturing and sales, etc."

With the change of the company name and securities acronym, the asset reorganization of FAW Xiali has officially come to an end, and "FAW Xiali" has officially become history.

Founded in 1997, Xiali Automobile can be said to be a glorious existence in the history of China's automobile development. It mainly produces "Xiali", "Weizi", "Weile" and "Weizhi" series cars, and its sales exceed those of Santana and Fukang brands at that time. It was once called "national car".

After entering 2010, with the efforts of other brands, FAW Xiali due to brand weakening, products and other reasons, resulting in a sustained downturn in sales, operating income and net profit plummeted, several times on the verge of delisting. According to statistics, the cumulative loss from 2014 to 2018 exceeded 7.5 billion yuan, and the net loss in 2019 reached 1.481 billion yuan, a year-on-year drop of 4068.32%.

In order to avoid delisting, FAW Xiali tried to save itself. In November 2019, FAW Xiali established a joint venture with Nanjing Bojun New Energy Automobile Co., Ltd., which originally thought that FAW Xiali would improve, but in fact, as a car manufacturing company that had only been established for three years, Boxun Automobile did not make it to the end. Boxun Automobile will enter the state of "closure" from August 1 to October 31, 2020, and will enter the state of "dissolution and liquidation" when the period of "closure" expires. Boxun cars are "too busy to take care of themselves", how can they take care of the FAW Xiali, which is in dire straits.

After there was no hope of cooperation with car manufacturers, FAW Xiali divided its assets and transferred the "shell" resources of listed companies to iron shares through asset restructuring. In September 2020, FAW Xiali issued a restructuring plan, which includes four parts: free transfer of FAW Xiali shares held by FAW Xiali, sale of major assets, issuance of shares to purchase assets and raising supporting funds.

According to the report, FAW car Co., Ltd. plans to transfer its 697620651 shares of FAW Xiali to China Railway Materials Co., Ltd. In addition, FAW Xiali plans to transfer all its assets and liabilities except the 17.5% stake in Xin'an Insurance and the remaining input tax to Tianjin FAW Xiali Operation and Management Co., Ltd. FAW Xiali then sold 100% equity in Xiali Operation and 17.5% stake in Xin'an Insurance to FAW shares.

At the same time, FAW Xiali plans to issue shares to China Iron, Iron shares, Wuhu Changmao, structural Adjustment Fund, Industrial and Commercial Bank of China Investment, Agricultural Bank of China Investment, Runnong Ruihang Bank, Eaton Fund, purchase its combined 100% equity stake in China Railway Wusheng Technology and 100% equity in Tianjin Company and 100% equity in total trade.

On January 4, 2021, "* ST Xiali" revoked the delisting risk warning, and the abbreviation of securities was changed from "* ST Xiali" to "FAW Xiali". On January 8, "Tianjin FAW Xiali Automobile Co., Ltd." was changed to "China Railway Materials Co., Ltd." and the securities abbreviation was changed from "FAW Xiali" to "China Iron". The business scope has changed from "car, automobile engine, auto parts, internal combustion engine parts and after-sales service" to "railway transport infrastructure equipment sales, rail processing, high-speed rail equipment, accessories manufacturing and sales, etc.".

Although affected by the epidemic and the car market, many car companies are finally on the verge of delisting because of poor management, but the epidemic is by no means the most direct cause, more is the problems left over from the history of the brand itself, which has been infinitely expanded under the influence of the epidemic, resulting in an unsustainable and imminent delisting. In this context, FAW Xiali has become history, but will not become the last tragic car company.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat