BEIJING (Reuters) – Chinese electric vehicle maker Human Horizons is seeking debt financing of up to 300 million yuan ($41.78 million) to resume production at its EV plant, as the parent firm of premium EV brand Hiphi has filed for a pre-bankruptcy process.
The last-ditch effort by another Chinese EV maker follows bankruptcy proceedings facing two units of real estate developer China Evergrande’s EV arm and a similar pre-bankruptcy procedure filed by EV startup WM Motor in October.
The fundraising, with 100 million yuan in the first round, will be used for guaranteeing after-sales services and restarting work, production and sales, according to a statement dated Saturday on the national enterprise bankruptcy information disclosure platform.
It came two days after a court in the eastern Chinese province of Jiangsu accepted the company’s application for pre-restructuring, a procedure that allows insolvent firms to seek turnaround under administrators appointed by the court before being legally bankrupt.
Founded in 2017, Human Horizons, with a factory in Jiangsu that previously made Kia cars, suspended EV production and sales in February.
Before that, Human Horizons sold more than 700 HiPhi EVs, priced between $47,213 and $111,418, averagely per month, per Reuters’ calculations based on data from ByteDance’s car information platform Dongchedi.
The struggles of the once high-profiled brand highlight a brutal consolidation among nearly 100 EV brands in the world’s largest auto market, which has worried U.S. and European policymakers that their home markets would be flooded by cheap Chinese EVs.
China and Chinese analysts have consistently rejected accusations it has an over-capacity problem or that its firms benefit from unfair subsidies, asserting that as the $18.6 trillion economy recovers, supply will better meet demand.
Domestic car sales fell 3.1% in July from a year earlier, extending declines for a fourth straight month with consumer confidence weak as the economy struggles to gain momentum amid a prolonged crisis in the property market.
($1 = 7.1802 Chinese yuan renminbi)
(Reporting by Qiaoyi Li, Zhang Yan and Kevin Krolicki; editing by David Evans)
