After the debt turmoil, the former A-share private car company Lifan Industry (Group) Co., Ltd. (*ST Lifan, 601777 .SH, hereinafter referred to as”Lifan shares“) is still trying to survive.
Lifan shares has determined its intention to reorganize investors.
On October 9, *ST Lifan issued an announcement on the progress of recruiting and reorganizing investors:On September 14, 2020, Chongqing Liangjiang Equity Investment Fund Management Co., Ltd. (hereinafter referred to as”Lifan Fund” ), Geely Maijie Investment Co., Ltd. (hereinafter referred to as”Maijie Investment”), as a consortium, submitted the registration materials of intentional reorganization investors to the manager in accordance with the provisions of the recruitment announcement.
Regarding the application materials, the administrator conducted a strict review. Within the time limit specified by the administrator, Liangjiang Fund and Maijie Investment paid the deposit and signed a confidentiality agreement. After confirmation by the manager, the registration of Liangjiang Fund and Maijie Investment are valid, and they are now participating in the company’s reorganization as intended reorganization investors.
The announcement pointed out that after the intention to reorganize the investor is determined, the manager will combine the progress of the reorganization work to speed up the negotiation and communication with interested parties such as the intended reorganization investor and creditors.
It is worth noting that Liangjiang Fund and Maijie Investment, which have confirmed their participation in the reorganization of Lifan, represent the government of Chongqing Liangjiang New District and Geely Holding Group.
Qixinbao information shows that Liangjiang Fund is 100%owned by Chongqing Liangjiang New Area Industrial Development Group Co., Ltd., backed by Chongqing Liangjiang New Area Management Committee. Maijie Investment was established on October 27, 2015. Its main business scope includes industrial investment, services, investment consulting (except securities and futures), and trustee enterprise asset management, etc. Geely Technology Group Co., Ltd. holds 99%of the company’s shares , The actual controller is Li Shufu, chairman of Geely Holding Group.
Affected by the above news, on October 9, *ST Lifan opened the daily limit and the closing price was 5.85 yuan.
Geely officially surfaced
In fact, in June of this year, Geely Holdings was repeatedly reported to have acquired Lifan shares news. In response to the rumors, Yang Xueliang, a spokesperson for Geely Holding Group, also decisively denied it, saying”there is no such thing.”
According to public information, Zhejiang Geely Holding Group was founded in 1986 and entered the automotive industry in 1997. It owns Geely Automobile , Lynk & Co, Volvo Cars, Polestar, Proton Motors, Lotus Motors, London Electric Cars, Long-distance New Energy Commercial Vehicles, Taili Flying Cars, Cao Cao Special Cars, Homer, Saxo Bank, Mingtai And many other brands.
In the eyes of industry insiders, this time Maijie Investment and Liangjiang Fund will participate in the Lifan shares as investors who intend to restructure. ‘s reorganization work means that Geely may take over and acquire Lifan shares; on the other hand, it is also Geely Hand in hand with Liangjiang New District and enter the signal of Chongqing”100 Billion Automobile City”.
As early as 2018, Li Shufu publicly stated that he was looking for opportunities to actively prepare for the project to land in Chongqing.
Since this year, the cooperation between Geely and Liangjiang New Area has been intensively implemented. Geely Holding Group’s Saxo (China) Fintech Project, Geely’s High-end New Energy Vehicle (Chongqing) Production Base Project, and Geely’s Smart Power Swapping Station Landed in Liangjiang New District one after another. It is reported that the Geely Automobile vehicle project was constructed on the base of Lifan Yuanyang Factory.
Lifan Motors Mandarin Duck Factory being dismantled
On September 29, Zhejiang Geely Holding also signed a contract with Chongqing Liangjiang New District to invest in the construction of Liangjiang New District”Geely Industrial Internet Global Headquarters Project”.
At the same time, as a listed company’s shell resources, land assets, and financial licenses, Lifan Holdings is also a key resource for reorganization.
According to data, Lifan Industry was established on December 1, 1997, and was listed on the main board of the Shanghai Stock Exchange on November 25, 2010, with a registered capital of 1.307 billion yuan. It is mainly engaged in passenger vehicles (including passenger cars). R&D, production and sales (including export) and investment finance of new energy vehicles), motorcycles, engines, and general gasoline engines. Among them, passenger vehicle products cover three categories:cars, SUVs and multifunctional passenger vehicles (MPV).
In the field of new energy vehicles, Lifan shares has invested more than 3 billion yuan in the past few years Two new energy bases have been established in Henan and Chongqing Liangjiang New District respectively. The total production capacity of the Henan plant alone has reached 100,000 vehicles.
However, the current reorganization plan is still in the confidential stage. How will Maggie Capital participate in the reorganization in the future, and what identity will Geely reintegrate after the reorganizationLifan shares‘s existing passenger car business and other key information is still unknown.
In addition, judging from the current announcement news, Maijie Investment and Liangjiang Fund have only submitted application materials and obtained recognition. The specific implementation rules and final results have not yet been concluded. The possibility of restructuring investors withdrawing from the restructuring is not non-existent. Therefore, even if Geely Maijie and Liangjiang Fund have become Lifan restructuring investors, the future of Lifan shares is full of great Uncertainty.
Lifan is reborn?
“If you still want to survive in the auto industry, it is likely to be acquired by others, or to become a part of other auto companies, then it may continue to exist.” This year Earlier, automobile analyst Zhong Shi said in an interview with a reporter from 21st Century Business Herald, “Lifan is basically out of the auto industry, but if you can do a good job of motorcycles, it is possible to turn over.”
According to Lifan shares‘s first half of 2020 financial report, its operating income for the first half of the year was only 1.584 billion yuan, a decrease from the same period last year 69.42%, net profit was 2.595 billion yuan, a drop of 173.99%year-on-year. Total assets are about 16.96 billion yuan, net assets are only 106 million yuan, a 96.12%year-on-year drop, liabilities are as high as 16.77 billion yuan, and the asset-liability ratio is as high as 98.87%.
In addition, a reporter from 21st Century Business Herald found that Lifan Industry had issued the”Announcement on Cumulative Design Litigation (Arbitration) Matters” on August 24. The announcement showed that the company is currently involved in litigation (arbitration) 1178 The amount involved is 5.037 billion yuan. Among them, as of June 18, 2020, the company (including subsidiaries) involved in litigation (arbitration) in the past 12 months totaled RMB 2.906 billion.
Before this, Lifan shares had repeatedly become a defendant due to overdue debt and lost the lawsuit. Regarding multiple debts that have been unable to be repaid normally, Lifan shares has clearly stated that the company currently has continuous losses, high debt, and There are business risks such as a large decline in the car business, large debts overdue, large assets being frozen, more litigation (arbitration) involved, shortage of controlling shareholders’ liquidity, and failure to return the raised funds, and the above risks have not yet formed any effective solution.
On August 6, Lifan Industry, the controlling shareholder of Lifan shares, said that it could not pay off its due debts. , On the grounds that the assets were not enough to pay off all the debts, they applied to the Fifth Intermediate Court of Chongqing Municipality for judicial reorganization, and the court decided to accept it on August 11.
On August 21, the Chongqing Bankruptcy Court announced its ruling to accept the bankruptcy of 22 Lifan companies including Lifan Industry (Group) Co., Ltd., Chongqing Lifan Passenger Vehicle Co., Ltd., and Chongqing Lifan Automobile Sales Co., Ltd. Complete application.
The Chongqing Fifth Intermediate People’s Court found that Lifan shares has been unable to pay off the debts due. In addition, the current monetary capital is 43 million yuan, the maturity debt is 1.196 billion yuan, and other assets are poorly liquid and cannot be realized, so they should be determined to be obviously lacking in solvency in accordance with the law.
While the company is in deep debt crisis, the production and sales data of Lifan shares is not ideal.
According to the August 2020 production and sales bulletin released by Lifan on September 14, the traditional passenger 23 vehicles were produced, a decrease of 91.81%year-on-year, and 15 vehicles were sold, a year-on-year decrease of 92.39%; 57 vehicles were produced, a year-on-year decrease of 73.85%, and 49 vehicles were sold, a year-on-year decrease of 78.79%.
This also means that Lifan shares has basically stagnated in the automotive business. From the perspective of industry insiders, Lifan has not formed its own core competitiveness and product strength when cutting into the automobile industry from the motorcycle industry, whether it is in traditional passenger cars, new energy vehicles, or the hot shared car field.
Lifan shares also pointed out in the announcement that although the company’s passenger vehicle business involves the new energy vehicle market Hot concept, but due to the company’s tight capital chain, it faces serious liquidity risks. At present, the company’s passenger vehicle business is currently facing stagnation. Passenger vehicles, especially new energy vehicles, have declined significantly, and the domestic market has basically lost. There are only a few export orders. , Technology research and development projects are progressing slowly, and passenger car brands are at risk of being marginalized.
Hovering on the verge of bankruptcy, Lifan shares have also tried many times to rescue themselves. In January 2017, in order to save costs, Lifan sold 90%of Chongqing Lifan Football Club to Wuhan Modern Technology Industry Group Co., Ltd.; in December 2018, Lifan sold its passenger car production qualifications to 650 million yuan. The price will be sold to Ideal Automobile and the production base of the 150,000 passenger car project in Liangjiang New District will be sold.
However, judging from the current operating conditions of Lifan shares, Lifan Motors has not been out of the predicament. Even if Geely Maijie and Liangjiang Fund participate in the reorganization of Lifan, Lifan shares may not be out of trouble.
Lifan shares hopes to fully optimize the debtor’s asset structure and debt structure by reorganizing investors’ participation And the equity structure, safeguard the legitimate interests of all creditors; effectively integrate industrial resources to achieve industrial transformation and upgrading; and finally create a company with optimized equity structure, complete governance structure, excellent asset quality, and sustainable profitability.
However, if the manager and the intended reorganization investor fail to reach an agreement on matters related to the reorganization investment and other reasons, the manager will eventually fail to recruit qualified reorganization investors. According to this recruitment and development, the follow-up reorganization investor recruitment and promotion work will be determined.
More importantly, this reorganization investor recruitment is still uncertain. Although the intentional reorganization investors were recruited during the registration period, there are still reasons for the manager and the intentional reorganization investors. Failure to reach an agreement on matters related to the reorganization of investment and other reasons may reorganize investors to withdraw from the reorganization.
In addition, even if the company implements reorganization and completes its implementation, if the company’s subsequent operations and financial indicators do not meet the requirements of the”Stock Listing Rules” and other relevant regulatory regulations, the company’s stocks will still be subject to delisting risk warnings Or the risk of termination of listing.
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