Brilliance Automotive Group, a large state-owned company in Liaoning province that was rumored to have defaulted on a major debt a few weeks ago, has been filing for bankruptcy reorganization.
According to Reuters, Brilliance was filed for bankruptcy reorganization in a local court by Gezhi Auto Technology, a manufacturer of automotive stamping dies. Gezhi Auto was founded in 2015 with a registered capital of RMB 95 million.
The report noted that Brilliance had made moves to transfer its shares early and avoid having its core assets frozen before a debt default occurred, which was seen by the market as a flight from debt.
Another large SOE, Henan State-owned Yongcheng Coal Power, also defaulted on its bonds without warning this week. The once-famous school-run enterprise, Ziguang, owned by Tsinghua University, is also currently on the brink of default. The Peking University-born Beifangzheng Group has also had a debt crisis before. The solvency of urban investment companies in some areas is also constantly being questioned. Distrust of SOEs is spreading in the market.
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