Baowo automobile, which once claimed the same name as Mercedes Benz, BMW and Audi as “bbba”, has submitted an application for bankruptcy liquidation to the court, and Beiqi Foton Motor Co.Ltd(600166) performance has been “affected”.
Recently, Beiqi Foton Motor Co.Ltd(600166) ( Beiqi Foton Motor Co.Ltd(600166) , SH; yesterday’s closing price of 2.46 yuan) announced that Beijing baowo Automobile Co., Ltd. (hereinafter referred to as Beijing baowo) was unable to pay off its due debts due to its financial exhaustion and its assets were insufficient to pay off all its debts, so it applied for bankruptcy liquidation and submitted relevant applications to Beijing No. 1 Intermediate People’s court.
The announcement said that Beijing baowo has suffered serious losses since its establishment. In order to repay its historical debts, it has paid off or mortgaged its assets. In addition, affected by the failure of the actual controller to lead the war, the capital chain is broken, financing is difficult, and there is a serious debt crisis. So far, it has failed to resume production. Since the end of 2021, the relevant assets necessary for the production and operation of Beijing baowo have been sealed up by Beijing No. 3 intermediate people’s court, and Beijing baowo’s extraordinary general meeting of shareholders has decided that Beijing baowo no longer has the ability of sustainable operation.
Beiqi Foton Motor Co.Ltd(600166) said that the bankruptcy liquidation of Beijing baowo will not affect the company’s existing main business and will not have a significant impact on the company’s continuous operation. However, due to the principle of prudence, Beiqi Foton Motor Co.Ltd(600166) the provision for large amount of impairment on relevant matters of Beijing baowo is expected to affect its total profit of about -4.704 billion yuan in 2021. In addition, considering the confirmation of investment income due to the company’s equity holding of Beijing baowo, it is expected to affect the total profit of about -5.326 billion yuan in 2021.
baowo’s “fate” is rough, but “rebirth” fails to revive
The “fate” of baowo brand is bumpy. Public information shows that baowo automobile was founded by German engineer Carl baowo in 1919. It was once the third largest automobile manufacturing enterprise in Germany. Later, it declared bankruptcy due to the rupture of the capital chain in 1961, and the fixed assets were bought by BMW and Mercedes Benz.
After more than 50 years of silence, the use right of baowo brand was favored by Beiqi Foton Motor Co.Ltd(600166) and was acquired at the price of 5 million euros in 2015. In January 2016, Beijing baowo Automobile Co., Ltd. was officially established. After the acquisition, baowo automobile issued slogans such as “German brothers” and “bbba”.
However, the market performance of baowo automobile failed to meet expectations, which also brought huge losses to Beiqi Foton Motor Co.Ltd(600166) company. According to Beiqi Foton Motor Co.Ltd(600166) financial report, from 2016 to 2018, the sales volume of baowo automobile was 30000, 44000 and 32900 respectively, the operating revenue was 4.539 billion yuan, 5.76 billion yuan and 3.06 billion yuan respectively, the net loss was 484 million yuan, 985 million yuan and 2.54 billion yuan respectively, and the cumulative loss in the three years was 4.009 billion yuan.
In October 2018, Beiqi Foton Motor Co.Ltd(600166) sold 67.7% equity of baowo automobile. On December 28, 2018, Changsheng Xingye became the transferee of 67% equity of baowo automobile with RMB 3.973 billion. Two months after the acquisition of Changsheng Xingye, Shenzhou Youche took over at the price of 4.11 billion yuan. It is understood that Changsheng Xingye is the shell company that Shenzhou Youche acquired baowo automobile. Since then, baowo automobile officially entered the Shenzhou department in 2019, with Lu Zhengyao, chairman of Shenzhou Youche, as the chairman, but the funds for the acquisition of baowo automobile have been delayed. As of January 15, 2020, Beiqi Foton Motor Co.Ltd(600166) there is about 1.481 billion yuan of remaining price not received.
In April 2020, Ruixing coffee exposed a false transaction of 2.2 billion yuan, and Ruixing’s share price fell 75% overnight. All listed companies in China were involved and fell into a financial crisis.
On April 1, 2020, Shenzhou Youche announced that baowo automobile plans to use fixed assets with an estimated value of about 4 billion yuan to offset the debt owed by BAIC Foton of 4 billion yuan. However, affected by the Ruixing incident, the scheme has not yet taken shape. A year later, Shenzhou Youche also withdrew from the new third board market.
In March 2021, baowo automobile had a debt of 600 million yuan due and could not be repaid. Beiqi Foton Motor Co.Ltd(600166) passed the deliberation proposal and became one of the bearers of baowo’s debt. On October 9 of the same year, Beiqi Foton Motor Co.Ltd(600166) announcement showed that due to Beijing baowo’s inability to repay Hua Xia Bank Co.Limited(600015) 4 billion yuan of loan principal and related interest on time, Hua Xia Bank Co.Limited(600015) urged the company to collect, and the company has compensated about 404 million yuan for Beijing baowo.
While bearing the debt for baowo, Beiqi Foton Motor Co.Ltd(600166) has not received the remaining transfer price of baowo. In December 2021, Beiqi Foton Motor Co.Ltd(600166) announced that the relevant assets of Beijing baowo were seized by Beijing No. 3 intermediate people’s court, and the book value of the seized property was 2.209 billion yuan Beiqi Foton Motor Co.Ltd(600166) said that the balance payment and interest receivable from Beijing baowo equity transfer of 1.417 billion yuan were not recovered on time, which was at risk of being unrecoverable. In order to safeguard its legitimate rights and interests, it applied to Beijing Arbitration Commission for arbitration and preservation.
Foton reduces performance impact through fixed increase and realization
Affected by the poor operation of baowo, the performance of Beiqi Foton Motor Co.Ltd(600166) was also impacted.
In the previously released performance forecast for 2021, Beiqi Foton Motor Co.Ltd(600166) disclosed the details of the accrued items: affected by the impairment of Beijing baowo related matters, Beiqi Foton Motor Co.Ltd(600166) expects the net profit attributable to the shareholders of the listed company to be about -5.035 billion yuan in 2021, with a loss of 5.552 billion yuan after deduction; After deducting the relevant factors of baowo, the total profit is about 355 million yuan; In the same period of 2020, the net profit was 155million yuan, with a loss of 996million yuan after deducting non-profit.
After the huge loss of net profit, Beiqi Foton Motor Co.Ltd(600166) ‘s book capital has also been left, the net cash flow from operating activities has been greatly reduced, and the existing funds have been difficult to repay debts and support their own operations. How to “return blood” has become a top priority.
According to the data, by the end of the third quarter of 2021, Beiqi Foton Motor Co.Ltd(600166) liabilities totaled 38.983 billion yuan, with an asset liability ratio of 71.18%, including current liabilities of 31.741 billion yuan, accounting for 81.42% of total liabilities. During this period, notes payable and accounts payable were 22.74 billion yuan, contract liabilities were 2.968 billion yuan and other payables were 4.271 billion yuan. Among non current liabilities, long-term borrowings reached 4.8 billion yuan.
Therefore, Beiqi Foton Motor Co.Ltd(600166) announced on April 1 this year that it plans to issue about 1.429 billion shares to BAIC group, the controlling shareholder, accounting for 21.73% of the total share capital of the company before the issuance, and the issuance price is 2.1 yuan / share, which is 20.45% lower than the secondary market on that day. The total amount of funds to be raised in this issuance is about 3 billion yuan, which will be used to supplement working capital and repay debts after deducting the issuance expenses.
In the announcement, the Beiqi Foton Motor Co.Ltd(600166) side said, “the funds raised by the company’s non-public offering of shares will be used to supplement working capital and repay debts.”
On April 6, Beiqi Foton Motor Co.Ltd(600166) also announced the public listing and transfer of 60% equity of Beijing Zhiyue in Beijing Equity Exchange, with a transaction price of 342 million yuan, in order to improve the use efficiency of relevant assets. Previously, Beiqi Foton Motor Co.Ltd(600166) also transferred the stamping business of Beijing Auman heavy truck factory, Hebei Reza heavy industry and Huairou heavy machinery factory at the listing prices of 196 million yuan, 247 million yuan and 1097 million yuan respectively.
It is worth noting that affected by the epidemic, the current performance of China’s commercial vehicle market is not ideal. Public data show that in March this year, China’s heavy truck market sold about 77000 vehicles, up 30% month on month compared with February this year, down 67% from 230000 vehicles in the same period last year, with a net decrease of 153000 vehicles. 77000, the lowest sales volume in China’s heavy truck market in March since 2017, only slightly higher than 75000 in March 2016.
Affected by this, as a leading enterprise in China’s commercial vehicle market, Beiqi Foton Motor Co.Ltd(600166) ‘s production and sales have also been impacted. However, under the wave of electrification, the cumulative sales of Futian new energy vehicles increased by 267.28% to 3199 in the first three months of this year.
Beiqi Foton Motor Co.Ltd(600166) said in the announcement on April 8 that Beijing baowo applied to the court for bankruptcy liquidation, and there was uncertainty about whether the court would accept it and how the final ruling would be Beiqi Foton Motor Co.Ltd(600166) will actively safeguard the legitimate rights and interests of the company, pay timely attention to the follow-up progress of the bankruptcy liquidation of Beijing baowo and disclose it in time. Please pay attention to the investment risks.
