The company was liquidated into the first case of Chinese car companies falling under the financial crisis
As one of the world’s largest auto parts manufacturers and exporters, Beitai, the “automobile kingdom†with more than 2,300 employees, is now the first case of the Chinese auto industry to collapse in the financial crisis.
The major shareholders of Beitai Entrepreneur submitted a winding-up petition to the High Court of the Hong Kong Special Administrative Region on February 6. On the same day, Beitai Automobile Industry Holdings, a wholly-owned subsidiary of Beitai, also drew the liquidation. At the same time, Deloitte Touche Tohmatsu Certified Public Accountants was appointed as a joint and individual provisional liquidator of Bei Tai and its subsidiaries.
The Deloitte Press Room stated that “the court has authorized the provisional liquidators to identify and protect the assets of the two companies. At the same time, the provisional liquidators will also participate in the discussions and negotiations on behalf of the two companies if they are deemed to be able to maximize the benefits for their creditors. One of its purposes is to restructure its business, operations and debt. "At present, "the provisional liquidators are negotiating with management, creditors and other related parties to review the business of the two companies and intend to purchase all or part of their business. All parties concerned solicit their intentions."
However, as of now, according to the reporter's understanding, the relevant company is still in operation, and Deloitte has sent personnel to take over Beitai's factories in Beijing and Anhui, and has not yet closed down factories or laid off staff.
Serious loss in foreign exchange contracts was claimed by 300 million
At the end of January, Beitai Ventures announced that due to the large loss of foreign exchange forward contracts, the company will have a net loss as of the end of March 2009.
Since July and August 2008, Beitai has signed five forward foreign exchange contracts with several banks. The forward contract is basically a one-year period and expires in July or August 2009, with reference to certain pre-set exchange rates between the Australian dollar/yen (62.7831, -0.1337, -0.21%) and the New Zealand dollar/yen respectively. Calculate the profit or loss and pay the yen every two weeks. The strange thing about the above contract is that only the stop-loss point has no stop loss point. Beitai has always obtained net profit from forward contracts. The total profit realized during the period was approximately RMB 50 million. However, based on the significant volatility in the foreign exchange market in the fourth quarter of last year, it may lead to a huge loss in the Beitai contract, causing it to suffer The net profit for the fiscal year 2008-2009 (as of March 31, 2009) was negative.
Misfortunes are not alone. Beitai has been a partner since 2000, and Shanghai Industrial Investment Group has filed a claim with the court, requesting Beitai to refund a prepaid amount of 326.6 million yuan, related fees and interest. Shanghai Industrial Investment Group had previously exported products related to Beitai agent and provided the advance payment required by Beitai. This cooperation was terminated in June 2008. According to the agreement between Beitai and Shanghai Industrial Investment Group, from July 2008 to December 2009, Beitai shall refund the advance payments provided by Shanghai Industrial Investment Group in monthly installments. Related costs and interest.
In response, Chen Wenkai, president of Gasgoo.com, believes that "If there is no financial crisis, Beitai may become one of the legends in the history of China's auto parts development."
The capital operation is dazzling
Although Beitai has a relatively short history, it has developed rapidly. From the start of batch production at the first plant in Anhui in June 1997, Beitai has become one of the top 100 parts in China by 2004 and has successfully entered the supporting systems of Shanghai GM, Chrysler and Beijing Benz. In the "China's Top 100 Auto Parts List of 2007 Companies" published by the China Association of Automobile Manufacturers in November 2008, North China has already ranked 27th, but Beitai's rapid development relies too heavily on financial institutions and capital market operations. The encounter buried the seeds.
In addition to the five long-term foreign exchange contracts signed with several banks, which ultimately led to huge exchange losses, Beitai Group’s and Beitai Venture’s ownership structure is also “dazzlingâ€.
Beitai Ventures, registered as a shell company in 2001 and listed in Hong Kong in 2003, has become very complicated.
On October 10, 2003, Cayman registered Beitai Ventures listed on the Hong Kong Main Board. The offer price was 1.33 Hong Kong dollars, 230 million shares were issued, the fund-raising amount was 2.7 billion Hong Kong dollars, and 120 times over-subscription. At the beginning of the listing, JP Morgan took a 7% stake. On the day of listing, the stock price rose by 22% to close at HK$1.65. Just one week after listing, Beitai Ventures announced that it had placed 30 million shares in additional placements, raising the amount of funds by another 38.5 million Hong Kong dollars. This action resulted in a small business with a revenue of 1.4 billion Hong Kong dollars in 2003 and a profit of 130 million Hong Kong dollars. At one time, the amount raised was more than 300 million Hong Kong dollars.
This is just a beginning. In the subsequent six months, Beitai Venture Capital Co., Ltd. raised funds 2 times and received a total of 535 million Hong Kong dollars in cash. As of March 31, 2004, after Beitai Ventures went public, fixed assets soared from 63.76 million yuan to 340.4 million Hong Kong dollars. 4.3 times.
According to public information, Beitai Entrepreneurship is controlled by a company registered in BVI with Fullitech and registered in Hong Kong, Beitai Corporation (now renamed Beitai Automobile Industry Holdings Hong Kong Company). This company also has a Sino-foreign joint venture operating in Beijing. Enterprise - Beijing Beitai Automobile Industry Co., Ltd., the following products and investment projects. This is a four-story structure, which is registered in four ways (Cayman Islands, BVI, Hong Kong, and Beijing) in four ways. Each is 100% controlled.
After a series of complicated capital operations, Lilly Huang, chairman of Beitai’s Board of Directors, eventually achieved control over Beitai Holding and Beitai Venture through several offshore subsidiaries.
“Through Beitai’s case, we need to reflect on the close relationship with the financial institutions and even their acquisition. What advantages and disadvantages are there for the development of the parts and components companies.†Chen Wenkai told reporters that if the economic situation is better, the financial market is more stable, financial Institutions can not only bring good strategies and management ideas, but also help companies slash costs and encourage companies to focus on cash flow instead of pure production and sales.
“But even in an optimistic environment, there will be many parts and components companies that have been sold at high prices after being taken over by financial institutions for a few years. This is not a good thing for the automotive industry, which needs long-term stable investment,†said Chen Wenkai. .
Reliance on exports without "roots" is difficult to stabilize
Chen Wenkai believes that in addition to relying heavily on financial institutions and capital market operations, another major factor that will eventually push Beitai to a dead end is that Beitai has vigorously explored foreign markets, especially the North American market, before it has stabilized its domestic market operations. North Thailand can not escape the clutches of the financial crisis."
In fact, before the financial crisis, Beitai is implementing a strategic transformation and plans to shift its development focus to China's OE (original equipment supporting) business in the next few years to provide high-tech parts and components for the mid- to high-end automotive market. Proposed to increase the proportion of domestic business to 50%.
However, with regard to the current business scope of Beitai, most of its business comes from foreign markets, especially the North American market. Its customers in the supporting market are Chrysler, Shanghai GM, and Beijing Benz. However, both Chrysler and GM are the most affected car companies in this financial crisis. Chrysler, in particular, has previously called Beitai "an important strategic partner for the Chrysler Global Renewal Program." Betting on Chrysler has caused Beitai to suffer from the challenge of becoming a fisherman.
The Gasgoo Automotive Analysis Report also pointed out that the development model of Beitai’s first export market and the resumption of the domestic market is questionable. Although the development of the international market is a good development strategy, it is necessary to have a solid foundation for domestic market operations before this. Otherwise, if North America and other markets caused by the current financial turmoil are depressed, they will only be able to “stand stillâ€.
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