A Case Study On The Performance Of “J&R Optimum Energy” Company’s Bankruptcy Reorganization

In 2016,J&R Optimum Energy acquired a power batter enterprise named Shenzhen Wotema,and entered the field of new energy power batteries.J&R Optimum Energy actively expanded its production capacity to increase its market share.The radical expansion strategy had brought great financial pressure to the company.At the same time,the subsidy policy of the new energy industry had declined,and the technical requirements for subsidized vehicles had been increased.Shenzhen Wotema fell into a liquidity crisis,and then the parent company J&R Optimum Energy fell into a debt crisis.J&R Optimum Energy actively sought ways to get out of the debt crisis,introduced reorganization investors to inject cash assets,handled the debts of subsidiaries.Finally,delisting was avoided through bankruptcy reorganization.The bankruptcy reorganization case of J&R Optimum Energy is representative.Based on the corporate bankruptcy reorganization system,this thesis analyzes the reasons why J&R Optimum Energy has fallen into the debt crisis,clarifies its motivation of reorganization,clarifies the implementation process of bankruptcy reorganization,and illustrates the compensation plan for creditors.Equally important,this thesis discusses the impact of successful bankruptcy reorganization on the company in terms of short-term market response,long-term financial performance,and the changes of economic value added.Based on this,it refines research conclusions and policy enlightenment,and points out follow-up topics.The main points of the thesis are:1.The trigger for the bankruptcy reorganization of J&R Optimum Energy was the debt crisis.The new energy industry policy had declined,the raw materials in the upstream of the industry had entered a price increase cycle.Therefore,the profit margin of the company as a midstream enterprise was compressed.In this context,the company chose a wrong expansion policy,which eventually led to the rupture of the company’s capital chain and the outbreak of the debt crisis.2.It is reasonable for J&R Optimum Energy to resolve the debt crisis through bankruptcy reorganization.After falling into the debt crisis,the company had adopted many self-rescue methods such as debt restructuring,collection of accounts receivable to obtain cash flow,pledge of accounts receivable to banks for credit enhancement,and establishment of partnerships to resume production,all of which ended in failure.However,the company’s battery production capacity could still meet part of the market demand,and the company had operational value.Therefore,the company chose to save its operating value through bankruptcy reorganization and safeguard the rights and interests of stakeholders and creditors.3.After the successful reorganization of J&R Optimum Energy,the short-term market had responded positively and financial performance had improved slightly.During the period of bankruptcy reorganization,on the day,the next day,and the third day of the announcement that the reorganization plan entered the execution period,the abnormal return rate of the company’s stock price reached 10.25%,9.66%,and 23.22%respectively(accumulated abnormal return rate).After the bankruptcy reorganization was completed,the company’s short-term debt repayment index increased to more than 1times,and the asset-liability ratio dropped to below 60%;the economic added value increased from-5.489 billion yuan to-713 million yuan,but it was still negative.4.Bankruptcy reorganization is not a fix once and for all,a successful reorganization is a new beginning for the enterprise.Bankruptcy reorganization is an effective means to resolve the crisis and can save the operating value of an enterprise.However,after successful bankruptcy reorganization,the enterprise still needs to continuously improve its own capabilities in order to continue to create value.The thesis studies the case of J&R Optimum Energy bankruptcy reorganization,clarifies the company’s steps and plans for bankruptcy reorganization from the perspectives of economy and finance,discusses the impact of successful reorganization on the company.Provide reference for listed companies to take bankruptcy and reorganization methods to get out of trouble.Due to the lack of relevant documents and the short time for the successful reorganization of the case company,the research results and promotion significance of this article need to be further observed and tested.