Recently, Tian Lixin, vice president of De'Longhi Group, participated in the theme activity of "Walking with the Leader - Paying Tribute to the 70th Anniversary of the Republic", and talked about this largest merger and acquisition case of the founding of the People's Republic of China with great feelings.

In 2018, the world's top 500 company Bohai Iron and Steel officially went bankrupt, and the Tianjin industrial pillar with 200 billion yuan of debt collapsed, known as the largest bankruptcy case in 2018. Subsequently, Bohai Iron and Steel entered the restructuring stage, and the steel king Ding Liguo entered the ownership strongly, which led to the largest merger and acquisition case since the founding of the People's Republic of China, and it is also a classic case of private enterprises acquiring state-owned enterprises.

Tian Lixin said that Bohai Iron and Steel involved 280 billion yuan in debt, 130 billion yuan in assets, and 17 steel assets were involved in the reorganization.

What is the concept of $280 billion in debt?

In 2014, Haixin Steel was in debt of 25 billion yuan, and the huge debt overwhelmed the private steel company, which was once the second largest in China and the largest in Shanxi Province, and entered bankruptcy restructuring in November of that year. Subsequently, China Steel Group broke out hundreds of billions of liabilities, which once again shocked the domestic steel industry. 

In addition to huge debts, Bohai Iron and Steel also has problems such as backward management, heavy financial burden, low level of informatization, lack of people's hearts, no passion for doing things, no market awareness, closed and conservative, backward concept, good equipment but not good products, etc.

So, why did De'Longhi participate in the restructuring of Bohai Steel that year? And how did this behemoth come back to life?

According to Tian Lixin, vice president of De'Longhi Holdings, De'Longhi Steel's participation in restructuring and mergers was mainly due to two considerations.

First, De'Longhi's strategy is to focus and focus on making steel and doing what it is good at to the extreme. Reorganizing Bohai Iron and Steel is one of the ways to make the enterprise bigger, better, stronger and more detailed.

Second, if Bohai Iron and Steel is successfully reorganized, it can realize the transformation and upgrading of the group's products, and also enable Delong to go out of Hebei and enable the group to achieve rapid and high-quality development.

Bohai Steel's M&A project lasted for three years, and from 2017 to 2019, Delong sent a team of 200 people, restructured assets of 60 billion yuan, and properly resettled 55,000 employees of Bohai Steel. After the reform, a total of 33 million tons of steel, entered the top five in the country and the top ten in the world.

Tian Lixin, vice president of De'Longhi Holdings, said that a comprehensive restructuring was carried out mainly from four aspects:

Integrate and boost employee morale. Increase wages.

Performance change. Mainly through the reform of the performance system and the optimization of the production process, the indicators become optimized, and the three assessment indicators of output, quality, and cost are fulfilled immediately.

Increase production and efficiency. After De'Longhi entered, it first carried out a rapid review, and the production index reached a new high every day through incentives, and now the monthly output has reached 1.9 million tons, which is nearly 90% higher than before the original entry.