AutoBeta(AutoBeta.net)06/19 Report--

Following the identification of Shenyang Automobile Co., Ltd. (hereinafter referred to as "Shenyang Automobile") as a potential investor in restructuring, brilliance Automobile Group Holdings Co., Ltd. has made new progress in its restructuring process for nearly three years.

On June 17, Jinbei Automobile and Shenhua Holdings issued announcements one after another to disclose the restructuring progress of brilliance Group, the controlling shareholder. According to the Jinbei Automobile announcement, Shenyang Automobile and 12 enterprises and managers including brilliance Group (the indirect controlling shareholder of the company) jointly signed the Investment Agreement for the substantive merger and reorganization of 12 enterprises such as brilliance Automobile Group Holdings Co., Ltd. the transaction consideration for this investment is no more than 16.4 billion yuan, and the 100% equity interest of brilliance Group is adjusted to Shenyang Automobile through the adjustment of investors' rights and interests. After the adoption of the above restructuring procedures, the actual controller of the company will be changed from Liaoning SASAC to Shenyang SASAC.

The announcement shows that the actual control of Shenyang Automobile is the Shenyang SASAC (that is, the State-owned assets Supervision and Administration Commission of the Shenyang Municipal people's Government), which has the corresponding ability to perform the contract.

According to Tianyan check information, Shenyang Automobile Co., Ltd. was established in February 2023 and is a wholly owned subsidiary of Shenyang Cairui Investment Co., Ltd. (hereinafter referred to as "Shenyang Cairui"). Shenyang Cairui is jointly owned by Shenyang Cisheng Investment Fund Co., Ltd. and Shenyang Metro Management Co., Ltd., with a shareholding ratio of 50% respectively. The equity penetration map shows that the actual controllers of Shenyang Cisheng and Shenyang Metro are both Shenyang SASAC.

Shenyang Caisheng Investment Fund Co., Ltd. is 100% owned by Shenyang Shengjing Financial Control Investment Group Co., Ltd., which is 67.421% owned by Shenyang SASAC, and Shenyang Metro Management Co., Ltd. is 100% owned by Shenyang Metro Group Co., Ltd. Shenyang SASAC holds 88.7273% of Shenyang Metro Group Co., Ltd.

In fact, there has been speculation in the market for the entry of Shenyang SASAC into brilliance Group. In April this year, there were media reports that relevant departments in Shenyang might buy brilliance shares from brilliance Group. Subsequently, brilliance China issued a clarification notice saying: "We are not aware of the matters reported by the media and the source of the information contained in them." The industry believes that the establishment of Shenyang Automobile may pave the way for the local government to reorganize brilliance Group. As for the reasons for Shenyang Automobile's investment in the automobile industry, Jinbei Automobile said in the announcement: "the main purpose of Shenyang Automobile Investment is to develop the automobile industry in Shenyang."

Data show that brilliance Automobile Group holding Co., Ltd. is a large vehicle manufacturing enterprise controlled by Liaoning SASAC, directly or indirectly holding and participating in four listed companies. and through its listed company brilliance China Automobile holding Co., Ltd. and BMW Group Joint Venture established brilliance BMW Co., Ltd. In November 2020, Shenyang Intermediate people's Court ruled to accept the creditor's application for the reorganization of brilliance Group, and then brilliance Group entered the bankruptcy reorganization process. In March 2021, the Shenyang Intermediate people's Court ruled that 12 enterprises including brilliance Group should be tried by substantive merger and reorganization, and appointed the manager of brilliance Group as the substantive merger and reorganization manager of 12 enterprises, including brilliance Group. After that, Shenyang Intermediate people's Court held three creditor meetings one after another, but the relevant plan was not adopted.

After several twists and turns, brilliance Group has been reorganized for nearly three years. As of June 1, 2022, a total of 6029 creditors had declared their claims to brilliance Group, totaling 57.718 billion yuan; the creditors' undeclared claims totaled 13.294 billion yuan; and the undeclared claims of employees totaled 786 million yuan, totaling 71.798 billion yuan.

In the past, both brilliance BMW and Golden Cup were in the leading position in the industry, but due to the development of brilliance and the changes in the car market, brilliance finally went bankrupt and reorganized. It should be noted that brilliance's largest joint venture and main source of profits in China, brilliance BMW, has undergone significant equity changes last year. Brilliance's stake in BMW fell to 25 per cent in February 2022 after selling a 25 per cent stake in the joint venture to BMW. With the change of brilliance's stake, brilliance was incorporated into BMW Group. Brilliance China's contribution profit as a joint venture also shrank to 2.38 billion yuan from 14.52 billion yuan in 2021, down 83.6 percent from a year earlier.

After three years, with the finalization of the "restructuring Investment Agreement", it means that the reorganization of brilliance Group may soon be settled. If the plan is passed, Shenyang Automobile will further join brilliance Group, and the actual controller of brilliance Group will be changed from Liaoning SASAC to Shenyang SASAC. According to the plan, the plan will be voted on at the fourth creditors' meeting on the 30th of this month, which will not take effect until it is approved by the court.

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