Xiali'S Retreating Edge: Can It Become The FAW Plant?

Once again, FAW Xiali went to the edge of the delisting.

In April 8th, the 2019 annual report released by FAW Xiali (000927.SZ) showed that the sales volume of FAW Xiali last year was 429 million yuan, down 61.85% compared to the same period last year. The net profit attributable to shareholders of listed companies was -14.81 billion, down 4068.32% from the same period last year. Up to the end of the reporting period, the total assets amounted to 1 billion 947 million yuan, with a total liabilities of 3 billion 305 million yuan, and the net assets attributable to shareholders of listed companies amounted to -13.9 billion yuan.

On the evening of the same day, FAW Xiali issued a notice that the net assets of the audited 2019 end were negative, and the company's stock transaction was warned by the Shenzhen stock exchange from April 10th. The stock was changed from FAW Xiali to *ST Xiali.

In 2019, FAW Xiali made two decisions in 2019, due to successive losses and poor operations. One is to mix and reform, to establish a joint venture with Bo County, to make use of the existing plant, equipment, part of personnel and production qualification to engage in automobile manufacturing and sales business; and the two is to transfer the "shell" resources of the listed company to the railway company through assets reorganization.

The dismal performance of the annual report made *ST's share price go down all the way, and the joint venture with Bo county also made no substantial progress because of the other's capital chain problem.

Recently, in twenty-first Century, the economic news reporter learned from many of the original Xiali staff office of the FAW Group that more than 200 FAW Xiali employees reported to the Central Commission for Discipline Inspection and other relevant departments because they suspected that the FAW Group was promoting the "mixed reform" process involving the Xiali and Bo County Joint ventures.

Up to now, FAW has not responded to the matter.

Once again, FAW Xiali went to the edge of the delisting. -IC photo

Bo county has no access to disk.

"The prospect is doomed."

In April 20th, a senior auto industry securities analyst told reporters in twenty-first Century economic report that in a very demanding automobile industry, such as capital, technology and strength, it is difficult for a new company without any background to save Xiali.

In September 28, 2019, FAW Xiali announced joint venture with Nanjing New Energy Automotive Co., Ltd. to set up a joint venture to develop and produce new energy vehicles. At the same time, it also includes R & D, manufacture and sales of passenger cars, auto parts, engines, electric drive systems, battery pack systems and energy storage systems.

It is worth noting that after the completion of the transaction, FAW Xiali invested 505 million yuan in the assets and liabilities of vehicle related land, plant, equipment and other assets, holding a 19.9% stake in the joint venture company, and assisting the joint venture to apply for the qualification of vehicle production. At that time, FAW Xiali will no longer have the qualification of vehicle production, and will not be able to continue to engage in vehicle production business. Nanjing Bo county invested 2 billion 34 million yuan in cash and its shareholding ratio was 80.1%.

FAW Xiali and Nanjing Bo county joint venture company "Tianjin Bo county", was formally established in October 2019.

Bo county will hold a new joint venture, and FAW Xiali will become a minority shareholder. In addition to accepting the assets of FAW Xiali's land, plant and equipment, the new joint venture took over 800 employees from the original FAW Xiali.

About more than 1000 men and women over the age of 50 and over 40 years old are retired. At present, there are more than 100 people left in FAW Xiali, more than 300 are waiting for posts, and 800 have gone to the joint venture company. In April 20th, a person familiar with FAW Xiali told reporters on twenty-first Century economic report.

Although the joint venture can raise salaries, some employees are worried about the prospect of the joint venture and have not terminate the labor contract with FAW Xiali.

According to FAW Xiali's announcement on the progress of asset restructuring in January 14th, Tianjin Bo County Automobile Co., Ltd. was registered in Xiqing district market supervision and Administration Bureau of Tianjin in November 18, 2019. As of January 13th, Nanjing Bo County paid 14 million yuan to Tianjin Bo County by way of currency. In addition, according to the agreement of the shareholders agreement, 832 employees voluntarily broke up labor relations with FAW Xiali, and signed a labor contract with Tianjin county.

However, those employees who went to the joint venture company failed to work on time. According to information previously released by Bo county automobile, its first car was put into operation in late 2019 and began to be delivered in the first quarter of 2020. However, a staff member from Tianjin Bo County told the economic news reporters twenty-first Century that the new joint venture has not yet rebuilt the factory, and the impact of the epidemic has yet to be seen. He also told reporters that employees from FAW Xiali to Tianjin county had not been paid for months.

"We need to invest a lot of money in building a car. The capital strength of Bo County itself is not strong enough. Last year, the financing situation of the whole industry was not good enough. If there is not enough capital, even if Bo county gets the factory, workers and qualifications of FAW Xiali, it will be very difficult to build a car. A former FAW Xiali employee said in an interview with the twenty-first Century economic report.

Months of failure to get wages, and uncertain future, some employees began to question the joint venture between Xiali and Bojun.

"Xiali is like a" burden "thrown away by FAW. The fundamental idea of the so-called "mixed reform" is to throw the company out, throw the debt out, reduce the debt and reduce the number of people. The former FAW Xiali employee said.

People who participated in the joint venture between Xiali and boxon, FAW, told reporters that many companies were negotiating for the acquisition of Xiali, because they had a lot of qualifications and many assets. The fact that Bo county can help absorb some employees is one of the reasons for the successful cooperation.

However, it is worth noting that in accordance with the cooperation agreement signed before, the car should be paid in the form of a currency to the joint venture company in the first thirty days from the date of the establishment of the joint venture company. It will pay second yuan RMB 1 billion 34 million yuan in the 6 months after the establishment of the joint venture company and the qualification of the joint venture company to obtain the vehicle production qualification within 6 days.

However, according to the relevant announcement issued by FAW Xiali, the 1 billion yuan contribution of Nanjing Bo County failed to pay on schedule. Up to now, it only invested 14 million yuan.

"Perhaps, Bo county does not have the ability to pay 2 billion capital. Although Bo County claims to have received 2 billion 500 million of its financing, no one has seen any related financing contracts. The above joint venture participated in FAW Xiali employee.

Where does Xiali go?

After the establishment of Tianjin Bo County, more than 800 employees and Xiali discharged their labor relations, and signed a labor contract with Tianjin county. Now it is impossible to return to Xiali because of the salary owed by Bo County, unless it is really a problem in the process of mix up, so employees must safeguard their rights. In April 19th, FAW Xiali employees told the business reporter in twenty-first Century.

If Bo county's capital chain problems continue to deteriorate, FAW Xiali will face greater obstacles. He believes that the 100 people who are still on duty at the FAW, plus 300 people waiting for the job and more than 800 people who go to the joint venture company, have more than 1000 car teams, which have a complete system of automobile production, many years of experience in building cars, and also have skilled technical and professional abilities.

"Through transformation, we were fully capable of becoming a" foundries "of FAW Group and continuing to live, producing one or two cars for other brands of FAW, instead of now. It is hard to understand why FAW is abandoning the land and plant owned by FAW Xiali, on the other hand, other subsidiaries are building new production bases. The transformation will surely cost a lot more than the new production base. " A FAW Xiali employee told reporters. He hoped that FAW Xiali could re evaluate the cooperation with Bo County, so that all Xiali employees who went to the joint venture would return to Xiali to form a complete car manufacturing system.

It is understood that FAW TOYOTA is building a new pure electric production base in Tianjin, with an annual capacity of 200 thousand vehicles. In April 15th, FAW Hongqi new energy automobile factory started construction in Changchun, with a total investment of 7 billion 600 million yuan, and the output reached 200 thousand units after the completion.

In September 2017, Xu Liuping took the lead in FAW and began a drastic reform. According to the reform plan of FAW, the new flag was developed by the FAW Group, and the new Pentium brand strategy was launched in 2018, and Xiali brand was frozen.

In the industry's view, FAW Xiali's position is quite embarrassing in the process of FAW reform. Since the autonomous sector is relatively weak, it will be difficult to achieve any success if it continues to carry out multi brand strategy. Insiders believe that after FAW Xiali's FAW TOYOTA assets were purchased by FAW shares, FAW Xiali itself has lost most of its value for FAW.

"If Tianjin Bo county goes down to the present state, everyone must follow the same" death ". There is a better way to solve the problem of Xia Li. The FAW Xiali people who participated in the joint venture finally told reporters.

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