By YANG Shihan
Brilliance Auto Group, the controlling shareholder of Jinbei Automotive and Liaoning Shenhua Holdings, is expected to be acquired by Shenyang Automotive.
Shenyang Automotive is owned by the local government of Shenyang, the capital and largest city of China’s northeast Liaoning Province. Shenyang will take over the entire assets of Brilliance Auto Group, valued at a total of 16.4 billion yuan (US$2.3 billion). That includes controlling rights to the three listed Jinbei, Liaoning Shenhua and Brilliance China.
Joint venture returned to sender
The plan will be voted on at a fourth creditors’ meeting, this time on June 30, and will take effect after court approval.
In November 2020, a Shenyang court accepted an application for restructuring filed by the creditors of Brilliance Auto Group, marking the beginning of bankruptcy proceedings. Since then, despite multiple rounds of voting, there has been no consensus on restructuring. Up to now, the talking has gone on for nearly three years.
As of June 1, 2022, 6,029 creditors had filed claims against Brilliance Auto Group, for a total amount of 58 billion yuan. (US$8 billion). Unclaimed debt amounts to 13 billion yuan, and the employee claims that do not need to be filed amount to 786 million yuan. That’s a grand total of 72 billion yuan against revenue of 1.1 billion yuan, half the income in 2021.
The group was forced to dispose of half its holding in BMW Brilliance, the main source of profit for the group, with 25 percent of the equity of the joint venture transferred to BMW, leaving Brilliance China with a 25 percent stake.
Rumors, denials, speculation
Shenyang Automotive, established in February 2023, seems to have been formed by the local government for the one and only purpose of acquiring Brilliance. In April, there were reports that Shenyang Ciy might acquire Brilliance, however, Brilliance China denied everything at the time.
Just a month later, a three-year plan for the Shenyang automobile industry appeared, suggesting the revitalization of the city’s vehicle manufacturing services.
