SMM: on the evening of September 23, * ST Zhongtai issued three announcements in succession to disclose the pre-restructuring of the company and replied to the inquiry letter of Shenzhen Stock Exchange's semi-annual report for 2020. On the same day, the Shenzhen Stock Exchange also sent a letter of concern and supervision to * ST Zhongtai again.
Zhongtai Motors' disclosure of the pre-restructuring, and the previous day * ST Lifan (601777.SH) announced the company's restructuring progress, made a "prophecy" that circulated in October almost come true. At that time, it was reported that the four auto companies, Zhongtai, Lifan, Huatai and Cheetah, would face bankruptcy, and an internal email from a joint-stock bank had clearly requested that the risk investigation of the four enterprises be conducted, which is expected to involve a total of about 50 billion yuan in the industry chain of upstream and downstream auto parts suppliers.
Nearly a year later, in addition to Zhongtai Motors, Lifan has also been ruled by the court to merge and restructure. Huatai Motor's dawning shares (600303.SH) 134 million shares in unlimited circulation have been frozen, while Cheetah's Changsha plant was taken over by Geely in April this year, but in the view of Ren Wanfu, an industry analyst, it only "postponed the bankruptcy of Cheetah to a certain extent".
Although the circumstances of the above four automobile companies are different, in the process of the transformation of the automobile industry to the "new four modernizations", the lack of core technology and the low ability to adapt to the market will inevitably lead to the gradual exit of weak enterprises, and the merger and reorganization of the whole industry will be further accelerated.
The court accepts Zhongtai's application for pre-reorganization.
On the evening of September 23rd, * ST Zhongtai announced that in order to smoothly promote the company's pre-restructuring work, maintain the operational value of the company, and realize the integration of resources, the company and its pre-restructuring managers are now openly recruiting investors to the public. On September 21, the people's Court of Yongkang City, Zhejiang Province accepted the application of the registered creditor for the pre-reorganization of * ST Zhongtai and selected Zhejiang Jingheng Law firm as the pre-reorganization manager.
According to the recruitment announcement, the purpose of recruiting and restructuring investors is to coordinate and coordinate the pre-restructuring of Zhongtai Automobile and its core business subsidiaries, with financial support from investors. comprehensively optimize the debtor's asset structure, debt structure and equity structure. In addition, the purpose of recruitment also includes the effective integration of industrial resources, to achieve industrial transformation and upgrading, and finally to build a company with reasonable ownership structure, perfect governance structure, excellent asset quality, sustainable operating ability and profitability.
It is worth mentioning that Tieniu Group, a major shareholder of Zhongtai Automobile, has also been ruled by the court to go bankrupt and reorganized. Zhongtai Motors said that the follow-up treatment of Tieniu's bankruptcy may lead to a change in the company's actual control.
Prior to the announcement of Zhongtai on September 17, Zhejiang Yongkang Agricultural Bank submitted an application for pre-restructuring to the people's Court of Yongkang City on the grounds that Zhongtai Motor was unable to pay off its due debts and obviously lacked the ability to repay, but still had the value of restructuring.
In August last year, Zhejiang Yongkang Nong Commercial Bank and other four banks as initial lenders, Zhongtai Motor as borrowers, signed the "RMB 3 billion liquidity syndicated loan contract." After Zhejiang Yongkang Agricultural Bank granted a loan to Zhongtai Automobile, Zhongtai Motor paid interest until March 20, 2020, and the loan matured on August 14, 2020. However, Zhongtai Motor eventually failed to repay the principal of the loan due at 150 million yuan and the interest after March 20, 2020.
While disclosing the above matters, * ST Zhongtai also replied to the Shenzhen Stock Exchange's inquiry letter on the company's 2020 semi-annual report. In terms of how to improve performance, * ST Zhongtai said that it will introduce strategic investors to restructure the company's business; raise funds through multiple channels and ways to solve the shortage of liquidity; adjust and optimize the organizational structure and business, and streamline establishment; take the mass production and listing of new models TS5 as a breakthrough to reshape the brand image; optimize the product layout.
* ST Zhongtai said that in the next stage, the company will continue to focus on solving the liquidity crisis. At the same time, * ST Zhongtai still pins its hopes on local governments, saying that it is "actively looking for partners and financial support with the help of local governments at all levels".
"marginal car companies like Zhongtai Motors are bound to withdraw from the market in the future." In the view of Cui Dongshu, secretary general of the Federation of passengers, some car companies do not pay attention to research and development, lack of technological upgrading, and fail to meet fuel consumption regulations and standards; at the same time, they are opportunistic in the process of developing new energy vehicles, pursuing low-end products when subsidies are strong, and with the tightening of policies, there are no sustainable products in the new energy market, "they will certainly enter the state of being reshuffled."
There are signs of bankruptcy rumors.
It is not just Zhongtai Motors that have been reshuffled. At present, Lifan has also entered the stage of restructuring because it is insolvent.
On September 22nd, * ST Lifan issued an announcement of the progress of the reorganization. The announcement shows that as of September 18, 2020, 62 creditors have declared their claims to the administrator, with a declared amount of 6.895 billion yuan. From the results of * ST Lifan in the first half of this year, we can see that its total assets have dropped to 16.962 billion yuan, its total liabilities have continued to increase to 16.771 billion yuan, and the asset-liability ratio has increased to 98.87%, while the net cash flow generated by operating activities is only 42.0446 million yuan.
On August 21, the Fifth Intermediate people's Court of Chongqing ruled to accept the bankruptcy reorganization of Lifan shares and appointed the Lifan enterprise liquidation group as the manager of Lifan shares on the same day. Similarly, the recent news of Huatai Automobile also mostly stays in the "complaint" of various companies. According to the announcement of its subsidiary dawning Co., Ltd., the total overdue amount of Huatai Motor's direct liabilities is about 3.892 billion yuan, of which the amount involved in litigation is 3.892 billion yuan.
In addition, another Cheetah car mentioned in the "prophecy" was recently exposed that due to the suspension of production of the manufacturer's car, the use of the balance of the DMS system, the suspension of the supply of spare parts, and the suspension of phone calls, dealers were unable to provide free after-sales maintenance services within the scope of the warranty. This means that the warranty service that Cheetah owners could have enjoyed for free during the warranty period of their vehicles has now become a fee-based program.
In fact, there are rumors that the four car companies will face bankruptcy. In June last year, the "sixth" emission standards have been implemented in various places, but none of the four enterprises have been able to produce fuel vehicles that meet the "sixth" emission standards. Since the beginning of this year, the performance of the four car companies in the market has plummeted. In the first half of the year, Lifan sold 1527 cars, Zhongtai 1417, and the other two companies less than 1,000.
In addition, upstream companies such as Bick Battery do business with all four companies and began a long "road of debt collection" as early as last year. In the lower reaches of the industrial chain and within the enterprise, the news of dealers' rights protection and layoffs are frequently exposed.
Since the beginning of this year, Cui Dongshu has mentioned many times that "the polarization within the independent brand camp has become very obvious," while Tan Benhong, executive vice president of Changan Automobile, has also said publicly that in the coming period of time, 50% of independent car brands are expected to cease to exist.
"although affected by the epidemic, the overall performance of China's auto market is expected to return to the level of the same period last year, but there are also serious problems in the auto industry, including blind investment, low capacity utilization, and zombie enterprises occupy a lot of important resources. it is urgent to speed up market-oriented management, legal management, and strengthen regulatory accountability." Cai Ronghua, deputy director of the National Development and Reform Commission, revealed the current situation of the automobile industry to some extent in his speech at a forum in September. And this also seems to indicate that bankruptcy restructuring may be the only way out for the above four car companies.