Brilliance Auto, the former Chinese giant, will still be unable to get rid of the cold winter in the early spring of 2024. Recently, news has been circulating in the market about Brilliance Auto Group's intention to retain 25% of BMW Brilliance's shares. Although Brilliance Group has denied this, the doubts of the outside world have not been dispelled. On the one hand, Brilliance Group's own predicament makes it difficult to prove its innocence; On the other hand, the attitude of its partner BMW is also intriguing.
According to Tianyancha data, as of 2022, there are only 37 employees left in Brilliance Auto Group Holdings, facing 999+ legal proceedings, with 1,806 risks and 20,046 surrounding risks. This makes one have to think of Brilliance Auto as a mess. Surprisingly, however, Brilliance Group has not given up to this day and has been helped by a mysterious force last year.
As early as 2018, Brilliance Group gave a 25% stake in BMW Brilliance**, and since then, it has completely lost its voice in this partnership. When Brilliance Group took the initiative to uncover this fig leaf, its sub-brands were marginalized by the market, and the group's financial problems were exposed. In 2020, the impact of the black swan of the epidemic further aggravated the financial crisis of Brilliance Group, and the accumulated debt reached 130 billion. In November of the same year, Brilliance Group was accepted to apply for bankruptcy reorganization by creditors and entered the bankruptcy reorganization procedure.
After three years of twists and turns, Brilliance Group finally met the right investor in its third recruitment. Shenyang Automobile acquired 100% equity of Brilliance Group in a ** transaction of no more than 14.6 billion yuan. The establishment time of this company basically coincides with the third recruitment time of Brilliance Group, and the actual controller is Shenyang State-owned Assets Supervision and Administration Commission. In addition, BMW Brilliance also won with 163.3 billion ** acquired the relevant assets of Brilliance China. BMW said it was to support the restructuring of Brilliance Group and to expand its business in Liaoning Province.
Despite the help of the nobles, the road to rebirth of Brilliance Group was not easy. In addition to internal management problems, the greater reason is that it has relied on the joint venture brand BMW Brilliance for a long time and neglected the construction of its own brand, resulting in the gradual loss of market competitiveness.
As of June 2023, Brilliance Group's total assets are still 7253.2 billion yuan, but the debt has been as high as 6337.5 billion yuan, with a debt ratio of more than 87%, which looks scary. If you don't count the profits contributed by BMW Brilliance, the net assets of Brilliance Group are about 40 billion.
The 25% BMW Brilliance shares in hand are like the last straw for Brilliance, if they are sold, they can indeed get a lot of money in the short term, but without this profit cow, Brilliance Group will completely lose the ability to repay debts, and the hope of rebirth will be instantly shattered.
There are many companies in the market that are salivating over the remaining 25% of BMW Brilliance's shares, and BMW itself may be the most interested buyer. If BMW realizes wholly-owned operation in China, not only can the profit be substantial, but also the word "Brilliance" at the rear of the domestic BMW can be cut off, which is undoubtedly a plus for the brand image.
All in all, if Brilliance Group wants to truly get out of the predicament and regain its strength, it must not only rely on the support of external funds, but also fundamentally strengthen the strength and market competitiveness of its own brands. And the equity of BMW Brilliance is undoubtedly a key bargaining chip that determines the future life and death of Brilliance.