简体中文
Logo of Huachen/VCG
A
court ruling
on Friday announced that the indebted Huachen Automotive Group, parent company of BMW's Chinese joint venture partner Brilliance Automotive Holdings, will undergo bankruptcy restructuring.
As the creditor Gezhi Automobile Technology Co claimed, Huachen's liabilities have outweighed its assets, meeting the requirements for bankruptcy. But the company is still worth restructuring, said the ruling by Shenyang Intermediate People's Court.
Less than an hour before the court ruling was released on the National Enterprise Bankruptcy Information Disclosure Platform, the company denied the bankruptcy rumor. Qi Kai, vice president of Huachen, told the
Beijing News
"I never heard of the decision, and all business goes on as usual."
Huachen could not be reached for further comment by press time.
Gezhi Automobile Technology Co filed an application on November 13 to the Shenyang Intermediate People's Court for the restructuring of Huachen, claiming the state-owned automaker failed to repay a 10.2-million-yuan modeling fee and interest to Gezhi as the company has been insolvent, the ruling said.
Huachen was founded in 2002 and owned by northeast China's Liaoning provincial government. It defaulted on a 1-billion-yuan ($152 million) bond last month.
As of the end of June this year, Huachen has total assets of about 46 billion yuan while its liabilities stand at as high as 52.4 billion yuan, according to public data.
Huachen has three domestic auto brands and its subsidiaries have two joint ventures with foreign companies – BMW and Renault.
BMW said on Tuesday that its deal to increase its stake in the joint venture with Brilliance China Automotive would not be affected by debt issues at Brilliance's parent Huachen, Reuters reported on Tuesday.
China Securities Regulatory Commission, the country's securities regulator, said in a
statement
on its website late Friday that it had conducted due special inspections over Huachen Automotive Group.
In accordance with the inspection results, the company received a warning letter, and an investigation pertinent to false information disclosure was launched. The intermediary agencies involved in the Huachen Group's bond default are also simultaneously verified.
The commission said it put a new premium on investors' lawful rights and is set to stringently crack down on varying law and regulation disobedience so as to maintain an orderly and healthy bond market without systemic risks.
