Formal bankruptcy reorganization of brilliance group

China-News - Finance November 22, 2020, 5:31 pm Wang Ying's avatar Wang Ying

Xinhua news agency, Shenyang, November 20 (reporters Chen Mengyang, Wang Wei) - Shenyang intermediate people's court ruled on the 20th to accept the creditor's application for reorganization of brilliance Automobile Group Holding Co., Ltd. (hereinafter referred to as brilliance group), marking that the auto enterprise has officially entered the bankruptcy reorganization procedure.

According to the court's ruling, brilliance group's assets are insufficient to pay off all its debts, and it has the cause of bankruptcy stipulated in the enterprise bankruptcy law. But at the same time, the group has the value and possibility of rescue, so it is necessary and feasible to restructure.

As a state-owned enterprise in Liaoning Province, brilliance group directly or indirectly controls and shares in four listed companies, and through its listed company Brilliance China and BMW jointly established brilliance BMW company. There are three independent brands of Zhonghua, Jinbei and Huasong, and two joint venture brands of brilliance BMW and brilliance Renault.

In late October, the 1 billion yuan private placement bonds issued by brilliance group only paid interest when they were due, but the principal failed to be paid, which caused concern. On November 13, a creditor filed an application for bankruptcy reorganization of brilliance group in accordance with the law.

According to the relevant person in charge of the state owned assets supervision and Administration Commission of Liaoning Province, brilliance group has been operating poorly for a long time, its own brand has been in a state of loss, and the debt ratio remains high. Since 2018, Liaoning provincial government and relevant departments have been trying to help brilliance group solve the cash flow problem, but its debt problem is too heavy to return.

This year, affected by the new crown pneumonia epidemic, brilliance group's independent brand management situation further deteriorated, and the long-term accumulated debt problem broke out. According to the report, the group's total debt ratio exceeded 5276 million yuan in half a year. In order to solve the debt problem, the relevant parties set up the brilliance group bank debt committee to strive for debt reconciliation, but failed.

According to the law, Shenyang intermediate people's court will appoint the administrator of brilliance group to be fully responsible for all work during the period of enterprise bankruptcy and reorganization, including accepting and confirming the creditor's claim declaration, preparing the draft reorganization plan and submitting it to the creditors' meeting for voting. Creditors will be paid according to the reorganization plan finally approved by the court.

The relevant person in charge of brilliance group said that the restructuring only involved the group's own brand plate, not the group's listed companies and joint ventures with BMW and Renault. As the most important partner of BMW in China, the group is expected to achieve rebirth after restructuring and try its best to recover the losses of creditors. At the same time, BMW Brilliance is still a stable source of profits in the future, and will continue to launch new products and expand the scale.

Civil ruling of Shenyang intermediate people's Court of Liaoning Province

(2020) liao01 Poshen No.27

Applicant (creditor): Gezhi Automobile Technology Co., Ltd., domiciled in group 5, Lianchang village, Baiquan Town, Dongliao County, Liaoyuan City, Jilin Province.

Wang Zhong, the legal representative of the company.

Entrusted agent: Yang Renguo, male, Han nationality, born on October 3, 1967, living in group 13, Xiancheng street, Xi'an District, Liaoyuan City, Jilin Province.

Respondent (debtor): Brilliance Automobile Group Holding Co., Ltd., with its domicile at No. 39, Dongwang street, Dadong District, Shenyang City.

Legal representative: Yan Bingzhe, chairman of the company.

Entrusted agent: Qi Kai, male, Han nationality, born on December 11, 1974, living at 3-10-2, No. 63 a 3, Beiyi East Road, Tiexi District, Shenyang City, vice president of the company.

Entrusted agent: Du Bo, male, Han nationality, born on October 31, 1978, living at 4-4-1, No. 30-2, Donghu street, Yuhong District, Shenyang City, working staff of the company.

On November 13, 2020, Gezhi Automotive Technology Co., Ltd. applied to the court for restructuring of brilliance Automobile Group Holding Co., Ltd. on the ground that brilliance Automobile Group Holding Co., Ltd. could not pay off its due debts and its assets were insufficient to pay off all debts and had restructuring value, Gezhi Automobile Technology Co., Ltd. submitted relevant evidence. The court informed the respondent Huachen Automobile Group Holding Co., Ltd. on the same day. On November 16, 2020, the respondent, brilliance Automobile Group Holding Co., Ltd., submitted to the court the "letter on no objection to the creditor's application for reorganization of the company", saying that it had no objection to the application for reorganization of Automobile Technology Co., Ltd.

On November 19, 2020 The hearing was held in May, and the applicants were sent to Automotive Technology Co., Ltd., the respondent brilliance Automobile Group Holding Co., Ltd., the shareholder of the respondent brilliance Automobile Group Holding Co., Ltd., the state owned assets supervision and Administration Commission of Liaoning Provincial People's government, and the creditor, Shenyang Branch of China Everbright Bank Co., Ltd., Liaoning Branch of China Development Bank, and China Development Bank Securities Co., Ltd Company Limited, Benxi Benxi Steel Sales Co., Ltd., employee Chi Guiyi, Liaoning local financial supervision and Administration Bureau, Shenyang Taxation Bureau No. 1 Tax Branch of State Administration of Taxation and other parties attended the hearing.

According to the industrial and commercial registration data, brilliance Automobile Group Holding Co., Ltd. was established on September 16, 2002, with its domicile at No. 39, Dongwang street, Dadong District, Shenyang. The registration authority is Liaoning provincial market supervision and Administration Bureau. It is a state-owned holding limited liability company. The registered capital of brilliance Automobile Group Holding Co., Ltd. is 80, The shareholders are state owned assets supervision and Administration Commission of Liaoning Provincial People's government and Liaoning Provincial Social Security Fund Council. The business scope of industrial and commercial registration is as follows: state owned assets management, entrusted assets management, development and design of all kinds of automobiles, engines and spare parts, providing technical consultation, manufacturing, refitting and selling all kinds of cars (subject to the announcement of relevant departments authorized by the State Council), engines and spare parts (including imported parts), and providing technical consultation, after-sales service, self-employed and agency equipment, etc Import and export of goods and technologies, technical consultation, technical services, capital operation, internal control management consulting services related to automobile, engine and spare parts manufacturing equipment, real estate development and new energy development, agency processing services, leasing services, and other business activities related to the above operations. (projects that need to be approved according to law can only be operated after being approved by relevant departments).

On October 16, 2020, the people's Court of Dadong District of Shenyang City issued (2019) Liao 0104 minchu No. 14339 civil judgment, ordering brilliance Automobile Group Holding Co., Ltd. to pay Gezhi Automobile Technology Co., Ltd. RMB 10167213.68 and corresponding interest. After the judgment was pronounced, brilliance Automobile Group Holdings Co., Ltd. issued a "notification letter" to Gezhi Automobile Technology Co., Ltd., saying that the creditor's right and debt relationship between our company and your company confirmed by the civil judgment No. 14339 of "Liao 0104 early Republic of China" is accurate, and the performance period of our company for the above debts of your company has already expired. We fully accept the above judgment and voluntarily give up the right of appeal. But at present, our company has a heavy debt burden and continuous operating losses. We are insolvent and unable to repay the above debts of your company The actual effect of the judgment of Huachen Holding Company Limited was not confirmed after the above judgment.

According to the balance sheet of brilliance Automobile Group Holding Co., Ltd. disclosed on the official website of Shanghai Stock Exchange, the assets and liabilities of brilliance Automobile Group Holding Co., Ltd. on June 30, 2020 were 45966931336.90 yuan and 52376708644.43 yuan respectively.

The court holds that the applicant, as the creditor of brilliance Automobile Group Holding Co., Ltd., has the right to apply for the reorganization of brilliance Automobile Group Holding Co., Ltd. as the applicant according to the provisions of the enterprise bankruptcy law.

The respondent brilliance Automobile Group Holding Co., Ltd. is a company type enterprise legal person registered and established. According to the provisions of the enterprise bankruptcy law, brilliance Automobile Group Holding Co., Ltd. is the subject of reorganization applicable to the enterprise bankruptcy procedure according to law. The domicile of the respondent brilliance Automobile Group Holding Co., Ltd. is No. 39, Dongwang street, Dadong District, Shenyang City. The registration authority is Liaoning provincial market supervision and Administration Bureau. According to the relevant provisions of the enterprise bankruptcy law, the court has jurisdiction over the case.

The applicant's personality causes Auto Technology Co., Ltd. to enjoy due creditor's rights to the respondent brilliance Automobile Group Holding Co., Ltd., which has not been paid off. The respondent brilliance Automobile Group Holding Co., Ltd. is clearly unable to pay off the creditor's right. The relevant balance sheet of brilliance Automobile Group Holding Co., Ltd. provided by the applicant's personality to Automotive Technology Co., Ltd. also shows that the assets of brilliance Automobile Group Holding Co., Ltd. are insufficient to pay off all debts, and brilliance Automobile Group Holding Co., Ltd. has enterprise bankruptcy laws and regulations The cause of bankruptcy. At the same time, Brilliance Automotive Group Holding Co., Ltd. has the value and possibility of rescue, and has the necessity and feasibility of restructuring.

In accordance with the provisions of Article 2, Article 3, Article 7, paragraph 2, Article 8, Article 70, paragraph 1 and Article 71 of the enterprise bankruptcy law of the people's Republic of China, the ruling is as follows:

To accept the reorganization application of Gezhi Automotive Technology Co., Ltd. to brilliance Automobile Group Holding Co., Ltd. This ruling shall come into effect on this day.

Chief judge Xu Yang

Judge Yu Xue

Judge Cong Fenggang

November 20, 2002

Assistant judge Xu Shuncai

Assistant judge Xu Chi

Clerk Dong Yue

Relevant laws on which the ruling of this case is based

Article 2 of the enterprise bankruptcy law of the people's Republic of China, where an enterprise as a legal person is unable to pay off its due debts and its assets are insufficient to pay off all its debts or obviously lacks the ability to pay off its debts, it shall clear up its debts in accordance with the provisions of this law. An enterprise as a legal person may, under the circumstances specified in the preceding paragraph, be reorganized in accordance with the provisions of this law.

Article 3 bankruptcy cases shall be under the jurisdiction of the people's court in the place where the debtor has his domicile.

If the debtor fails to pay off the debts due, the creditor may apply to the people's court for reorganization or bankruptcy liquidation of the debtor.

Article 8 when applying for bankruptcy to the people's court, the bankruptcy petition and relevant evidence shall be submitted. The bankruptcy application shall contain the following items: (1) the basic information of the applicant and the respondent; (2) the purpose of the application; (3) the facts and reasons for the application; (4) other matters that the people's court considers should be specified. If the debtor applies, it shall also submit to the people's court an explanation of the state of the property, a detailed list of debts, a detailed list of creditor's rights, relevant financial and accounting reports, plans for the placement of employees, as well as the payment of wages and social insurance expenses of employees.

Article 70 the debtor or creditor may, in accordance with the provisions of this law, directly apply to the people's court for reorganization of the debtor. Article 71 If, after examination, the people's court considers that the reorganization application complies with the provisions of this law, it shall order the debtor to restructure and make a public announcement.

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