AutoBeta(AutoBeta.net)10/20 Report--

On October 20, the website of the Anti-monopoly Bureau of the State Administration of Market Supervision announced the case of BMW (China) Investment Co., Ltd. acquiring a stake in brilliance Automobile Manufacturing Co., Ltd.

According to the documents, brilliance Automobile Group Holdings Limited ("brilliance Group") currently holds a 100% stake in brilliance Automobile Manufacturing Co., Ltd. ("brilliance Manufacturing"), thus controlling brilliance Manufacturing alone. BMW (China) Investment Co., Ltd. ("BMW China") has signed an equity sale and purchase agreement with brilliance Group to acquire the entire stake in brilliance Manufacturing. After the proposed deal, BMW China will control brilliance separately.

According to the data, BMW China was founded in 2019, and its business is concentrated in China, mainly for holding and managing BMW Group's investment projects in China. Brilliance Manufacturing is currently a wholly owned subsidiary of brilliance Group. Brilliance Manufacturing was established in December 2019 in Shenyang, Liaoning Province, mainly engaged in the development, design and sales of all kinds of automobile related business.

As early as September this year, there were media reports that BMW China would acquire assets related to brilliance and its stake in brilliance. These include land use rights, buildings, machinery and equipment and other related assets, as well as brilliance Group's 100% stake in brilliance Automobile Manufacturing Co., Ltd., totaling 1.633 billion yuan.

BMW China said: "with the strong support of the Liaoning and Shenyang municipal governments, BMW has established a strong partnership with brilliance over the past 18 years. For BMW, Liaoning Province and Shenyang have become key innovation and production bases in China, as well as the cornerstone of our future success in China. We hope to support the restructuring of brilliance with practical actions and are committed to further expanding our business in Liaoning Province. We hope to use the existing production capacity of brilliance Automobile Manufacturing Co., Ltd. However, the project is still in the approval process of the relevant departments. "

According to public data, as of November 2020, the assets related to brilliance brand production are 1.233 billion yuan, which is also one of the main contents of BMW's acquisition of brilliance China. In addition to the 1.233 billion yuan asset offer, BMW China's 1.633 billion yuan price has a 400m yuan premium, which is used to pay for BMW's stake in brilliance Manufacturing in China.

Brilliance Automobile Group, which looks like a huge scale, is actually flashy. Brilliance Group's profit support basically comes from brilliance BMW. Judging from the operation situation in the past five years, brilliance Automobile Group realized net profit of 3.494 billion yuan, 3.682 billion yuan, 4.376 billion yuan, 5.876 billion yuan and 6.763 billion yuan respectively from 2015 to 2019. Excluding brilliance BMW, the net loss was 334 million yuan, 316 million yuan, 862 million yuan, 424 million yuan and 863 million yuan. In the first half of 2020, the net profit of brilliance Group increased by 25.24% over the same period last year to 4.045 billion yuan. But excluding brilliance BMW, the net loss was 340 million yuan. As of press time, brilliance has not yet released its annual report for 2020 and interim report for 2021.

On November 20, 2020, the Shenyang Intermediate people's Court ruled to accept the creditor's application for the reorganization of brilliance Automobile Group holding Co., Ltd., marking that the car company has officially entered the bankruptcy reorganization process. According to the information released by the second debt Association, as of August 13, 2021, a total of 6005 creditors have declared their claims to the manager, the amount of claims declared is about 54.313 billion yuan, and the amount of claims initially determined and suspended by the manager is about 49.983 billion yuan. In addition, according to the survey, it is estimated that the employee's claims and undeclared claims are about 12.001 billion yuan. Therefore, the total estimated liabilities of 12 enterprises, including brilliance Group, are 61.984 billion yuan.

At present, brilliance is still in a state of restructuring, and it is still unknown who will become brilliance's white guard. As a large vehicle manufacturer, brilliance will not "die", but it is not easy to return to its peak.

It is worth mentioning that just yesterday, an insider provided the media with a first draft of the employee placement plan. The document, entitled "instructions on the Placement of employees in restructuring Enterprises," shows that brilliance will, in accordance with relevant laws and regulations, protect employees' rights and interests through agreement to terminate contracts, economic layoffs, contract termination and other positions.

On March 31 this year, brilliance China announced the suspension of trading in Hong Kong stocks, but has not yet resumed trading. Brilliance China shares are currently trading at HK $7.30, with a total market capitalization of HK $36.83 billion (30.6 billion yuan).

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