Ltd., a subsidiary of China Taiping Insurance Group, is so far the largest creditor, claiming 1.2 billion yuan of debt. In a November statement, Brilliance Auto said it defaulted on debt totaling 6.5 billion yuan, along with 144 million yuan of interest.Īmong the lawsuits against Brilliance Auto, Taiping Asset Management Co. Since the restructuring, creditors including several banks have sued Brilliance Auto, claiming a total of 3 billion yuan of unpaid debts, according to company statements. Most of the enterprises had sound credit-rating records and government backing, so the defaults caught investors off guard and set off a chain reaction affecting other debt issuers and local government financing vehicles.Ĭover Story: How SOE Default Wave Shows State Bailouts Are Over established a joint venture with the German luxury automaker to produce passenger cars under the BMW brand in Liaoning’s capital, Shenyang.Ĭontrolled by the government of the northeast province of Liaoning, Brilliance Auto is one of several local government-owned companies that sent jitters through China’s bond market with abrupt defaults. In 2003, its Hong Kong-listed subsidiary Brilliance China Automotive Holdings Ltd. 23.īrilliance Auto is best known outside China for its collaboration with BMW. The court’s decision came about one month after Brilliance Auto failed to repay 1 billion yuan ($152 million) in principal and 53 million yuan in interest on bonds due Oct. A local court determined that the company did not have sufficient assets to repay all its debts but that it “has value and could possibly be saved.” Shenyang-based Brilliance Auto started bankruptcy restructuring in November after it failed to repay money due creditors. The Sichuan-based bank sued Brilliance Auto along with two affiliated companies, Mianyang Huaxiang Machinery Co. Ltd., which rattled the country’s bond market last year with a high-profile default, faces a pile of lawsuits claiming unpaid debts totaling almost 3 billion yuan ($457 million), as the company struggles with a restructuring.Ī latest suit against Brilliance Auto was filed by Mianyang City Commercial Bank, involving 60 million yuan of disputed debt, the company said last week in a statement. China’s state-owned carmaker Brilliance Auto Group Holdings Co.
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