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Remember the self-proclaimed "Ashkenazi Top 4" and "BBBA" Borgward Motors? This is completely out of the play!
On December 9, Foton Motor announced that due to its inability to repay the arrears owed by suppliers and other creditors (the amount involved in the case was about 123.565 million), a total of 34 creditors applied for the seizure of assets, including machinery and equipment, transportation equipment, office equipment, IT equipment, tooling molds, other equipment, construction in progress, inventory, etc., with a book value of 2.2 billion yuan.
Foton Motor said that the assets seized are all necessary for the production and operation of Beijing Borgward, and this seizure will have a significant impact on Beijing Borgward. In fact, the production and sales of Borgward have basically stopped, the brand itself has not accumulated a little reputation, and the impact is not so important. But it is true that the recovery of company-related claims has a detrimental effect, as Foton Motor also holds a 24.79% stake in Borgward Motors.
For Beijing Borgward, this move is undoubtedly worse.
As early as November 18, Borgward was ordered by the court to seal, seize or freeze the assets of Beijing Borgward's guarantor, UCAR, worth 1.645 billion yuan, and the first batch of preservation within the scope of this preservation was to freeze the equity of Shenzhou Flash Loan (Pingtan) Financial Leasing Co., Ltd. and UCAR (Fujian) Information Technology Co., Ltd. held by UCAR.
Earlier, on September 18, Foton repaid 403 million yuan due to Beijing Borgward's inability to repay the principal of Huaxia Bank's loan of 400 million yuan and related interest on time. After this compensation, the balance of the guarantee provided by Foton Automobile to Beijing Borgward is 310 million yuan, and the amount of overdue guarantee is 310 million yuan.
Debt has been lingering on Beijing Borgward. The related Futian and Shenzhou UCAR also have words of suffering.
In 2014, Foton Motor, which was preparing to enter the passenger car business, chose to spend 5 million euros to buy a car brand, paying attention to only the brand, and later relying on its own R & D team to develop products. This brand is the German Borgward that has long been bankrupt and has no related core technology.
Borgward BX7
Two years later, in 2016, the first SUV model, the Borgward BX7, debuted, with a total sales volume of 30,000 units that year; in 2017, the second SUV model, the Borgward BX5, appeared, with annual sales of 44,400 units. The rapid decline in sales began in 2018, when monthly sales were less than 2,000 units. Later, Borgward BX6 and Borgward BX3, which later withdrew, basically did not contribute much sales.
Borgward BX5
Although it is pushing new cars and selling new cars, Borgward has been losing money since 2016, and since then the annual loss has expanded from 484 million to 2.545 billion, with a cumulative loss of more than 4 billion in 3 years. Moreover, after the huge decline in sales, Borgward is equivalent to falling into a bottomless pit of losses and unable to fill.
In October 2018, Foton chose to stop the loss in time and sell 67% of the equity of Borgward. Two months later, the 67% stake was purchased by Changsheng Xingye for 3.973 billion yuan.
Behind Changsheng Xingye's purchase of Borgward is the support of UCAR. At that time, UCAR business was booming, if it could have its own car source to supply car rental, rent instead of purchasing and other businesses, it undoubtedly opened up a new development path, and finally achieved the purpose of selling cars in the name of car rental. Therefore, by March 2019, UCAR took over a 67% stake in Borgward from Changsheng Xingye for 4.109 billion.
Since then, the most famous thing may be the birth of the hilarious "good is expensive, expensive is good, Borgward good, expensive" magic advertisement.
Lu Zhengyao is the actual controlling shareholder of Luckin
Unfortunately, UCAR is also unfavorable, luckin coffee was exposed to false transactions, directly led to a sharp decline in the stock price of China Car Rental. Moreover, the new model of car sales of UCAR abandons the interests of Borgward dealers, causing dealers to defend their rights and withdraw from the network. In the end, not to mention selling cars, Borgward could not even build cars.
Today, what can also link Futian, Borgward and UCAR is a huge network of debt relationships.
At the end of October this year, Foton Motor issued the "Announcement on the Provision for Asset Impairment in the Third Quarter of 2021", showing that as of September 30, 2021, foton Motor's balance of other receivables related to Borgward Automobile was about 1.215 billion yuan, of which the provision for bad debts was about 464 million yuan.
At the same time, Foton Motor's and Borgward Automobile's Changsheng Xingye (Xiamen) Enterprise Management Consulting Co., Ltd. (hereinafter referred to as "Changsheng Xingye") as of September 30 this year involved a balance of about 1.671 billion yuan in other receivables and a provision for bad debts of 655 million yuan.
Why is there a provision for bad debts? Of course, both major debtors are short of funds.
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