Domestic Loncin motorcycle as early as 2019 has been heavily indebted, the amount involved reached 31.9 billion, its 13 subsidiaries because of the inability to repay the debt can only apply for bankruptcy, in which Tu Jianhua as the founder of the company, has long been unable to bear, as the former "motorcycle king", what happened in the middle?
Mention of Loncin Group presumably the public is no stranger, it was once a representative enterprise of the domestic motorcycle industry, both motorcycle sales and exports are among the best, but in recent years its development is not optimistic, as early as 2019, Loncin Holdings' total assets although reached 45.903 billion, but at the same time its liabilities up to 31.9 billion.
At the end of September this year, its 13 subsidiaries could no longer survive and could only apply for bankruptcy reorganization, and the application has now been registered by the court, affected by the debt crisis, and more than 50% of Loncin GM's shares have been frozen.
This news also means that Loncin Holdings as the first actual controller, its identity has now changed, Tu Jianhua as the founder of the company, is not now qualified to fully control the enterprise, no matter how Loncin Group appeared such a scene is indeed surprising to everyone, after all, it was once the leader in China's motorcycle industry.
With the support of the domestic market in the early stage, Loncin Motorcycle gradually stood out, as early as 1999, its annual sales have reached 160 million, and since then, with the influence of sports events, its brand awareness has also been continuously improved, and it has also become the first motorcycle export enterprise in China, ranking second in the industry in terms of output.
Looking at these performances alone, it is not difficult to find that the performance of Loncin motorcycles in the market is still quite good, so why did it develop to this step?
The reason for this situation is also related to the founder Tu Jianhua, who gradually gained a foothold in the motorcycle industry, and also began to continuously expand the scale of the company's development, and in order to unify the management of its subsidiaries, Loncin Holdings was also created in 2002.
After formulating the development strategy, Tu Jianhua also came up with practical actions, by 2012, its subsidiaries have as many as 86, including the financial field, logistics industry, insurance business, etc., but the company's development to this point, Tu Jianhua has not been satisfied, and has since been marching into different fields.
Even in just 4 years to invest in 3 listed companies, in the case of rapid expansion, Loncin Holdings has become a large enterprise in the minds of the public, Tu Jianhua has also taken advantage of its continuous increase in value, and even once exceeded 50 billion.
But we all know that Loncin Group was only a motorcycle company at the beginning, even if it is in the leading position in the industry, but it is obviously unrealistic to rely on this main business to support the development of all its subsidiaries, in the case of increasing outflow of funds, once one of the links has a problem, then Loncin Holdings will face an existential crisis.
In the process of development, the reality of Loncin Holdings is indeed the case, the real estate business is the fuse of Loncin Holdings to the crisis, as early as 2002 Tu Jianhua led the company to the real estate field, in 2014 funded to win a major project in Chongqing.
However, on the project, there were some differences between the two partners, and Tu Jianhua also intended to withdraw from the real estate market, so he began to sell the property, but one of the companies has been in arrears in payment, which has also led to the delay in the arrival of 6 billion yuan of funds, for any company, 6 billion of funds is not a small amount.
Not to mention that at that time, Loncin Holdings had already had certain capital problems, and the 6 billion funds were delayed in arriving, which was bound to lead to the company's worsening, and this arrears were dragged on for 4 years, although the other party finally paid 2.5 billion, but there were still 3.5 billion unpaid.
For this situation, Tu Jianhua has also been dragged down by this enterprise, and even Tu Jianhua has publicly stated that 2018 is his most difficult year, which can also be seen how much pressure he has.
Because of the fact that a large amount of funds from the sale of the property has not been recovered, the company can be said to have collapsed in terms of funds, in which Tu Jianhua also had to take out 1.024 billion shares in the company to pledge, thereby alleviating the problems in the flow of funds.
However, this did not save the company from fire and water, and eventually its 13 subsidiaries filed for bankruptcy, and Tu Jianhua himself was restricted from high consumption.