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1.6 billion yuan too cheap? BMW's $1.6 billion takeover of Brilliance's Factory in China has been called off

via:AI财经社     time:2021/11/26 16:03:04     readed:250

Article | AI club. Wang xin is financial

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Brilliance filed for bankruptcy reorganization last November as it struggled to save itself from a mountain of bad debts. When BMW China bought brilliance's assets for 1.633 billion yuan, it was considered an "act of kindness". On October 20 this year, the stock acquisition case had been published on the website of the Anti-monopoly Bureau of the State Administration for Market Regulation, but a month later, the "acquisition" appeared in doubt.

On November 25, a Brilliance group insider told Tencent Auto, "The acquisition of the China factory by BMW has been called off, and THE BMW staff in the China workshop have been withdrawn."

The source also revealed that faW leaders are meeting with brilliance group executives recently, and Brilliance group believes that BMW's 1.633 billion yuan purchase price of the Chinese factory is too cheap, and there are internal objections.

BMW would not confirm or deny the claim. BMW China responded to AI Finance on Nov. 26, saying, "The project continues to receive support from all parties and is progressing as planned. We are unable to comment further on the matter at present."

In August 31, 12 enterprise merger restructuring substance such as brilliance group held the second creditors' meeting, with 1.633 billion yuan to buy BMW among them "Chinese" car related assets of the bill through in the meeting, but the pass rate is not high, agreed amount accounts for only 57% of creditor's right amount meeting, the lowest share is through the bill.

According to the previous equity acquisition agreement, BMW China purchased the land, plant, equipment and other production assets of Brilliance China, as well as the production qualification of Brilliance Automobile Manufacturing Co., LTD.

BMW China bid 1.633 billion yuan for the acquisition, including related assets for land use rights 3 items, valued at 240 million yuan; 19 houses and buildings and 20 structures, worth 700 million yuan; 179 items of machinery and equipment, worth 293 million yuan; The 100% equity of Brilliance Automobile Manufacturing Co., Ltd. held by Brilliance Group is worth only 0.4,500 yuan, totaling 1.233 billion yuan; In addition, the vehicle production qualification of 400 million yuan.

On October 20, BMW (China) Investment Co., Ltd. signed an equity purchase and sale agreement with Brilliance Group to acquire all the equity of Brilliance Manufacturing. The proposed deal would give BMW China sole control of Brilliance Manufacturing.

However, the equity transfer is expected to be completed at the beginning of 2022, subject to a series of prerequisites such as Asset injection from China, transfer of after-sales responsibilities of Zhonghua and Xinri Auto, maintenance of automobile production qualification, approval by government departments, and removal of policy restrictions on foreign investment in the automotive industry. The equity delivery date is no later than June 30, 2022.

Now the acquisition of a new variable, BMW China will give up the acquisition?

"The project continues to receive support from all parties and is proceeding as planned. We are unable to comment further on this matter at this time. Please understand," BMW China said in response to AI Finance's request for confirmation.

Notably, Brilliance China sold 25% of BMW Brilliance to BMW in 2018, with BMW owning 75% of BMW Brilliance effective in 2022. It can be seen that BMW will launch more local models in the future, and the sole control of Brilliance manufacturing will also provide more convenient conditions for BMW to produce local models in China.

Will the whole bankruptcy reorganization of Brilliance automobile be mentioned again?

In fact, after the second creditors' meeting on August 31, some creditors believed that once BMW succeeded in acquiring Brilliance Auto, it would be impossible for brilliance Auto to go bankrupt and restructure as a whole, and the remaining assets of the group would also be sold in pieces, which would not give full play to the value of the overall restructuring.

AI Finance has learned that the Shenyang Intermediate Court has extended the submission period of the draft rebirth plan for the substantive merger and reorganization of 12 companies, including Brilliance Group, to December 3, 2021. This means that until the draft of the rebirth plan is passed, everything is uncertain.

So, whether will FAW Group move?

As early as February this year, it was revealed that FAW Group planned to pay 7.2 billion US dollars for the stake in Brilliance China. Faw first acquired Brilliance's 30.43 percent stake and liaoning Communications Investment Group's 11.89 percent stake, and then FAW made a mandatory offer for the rest of Brilliance. In the face of this rumor, Brilliance group said it could not disclose, and FAW directly responded to the information is not real.

And recently faW group again contact Brilliance group was confirmed to be true, brilliance auto bankruptcy restructuring more complex and changeable.

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