Hozon New Energy Automobile Company (Hozon), the bankrupt parent company of Chinese battery electric vehicle (BEV) start-up Neta Auto, looks set to be acquired by Zhejiang Taiyi Shanglian Enterprise Management Partnership (Taiyi Shanglian). Taiyi Shanglian is a purposely established management company set up earlier this year by Zhejiang Shanzi Holdings Company and Zhejiang Shanzi Yuxu Technology Company.
According to local reports, a fourth Hozon creditors meeting was held online on 11 September, resulting in the release of a new "Draft Reorganization Plan" involving Taiyi Shanglian investing CNY 3 billion (US$ 447 million) to acquire a 70.6% stake in the automaker.
According to the draft proposal, a CNY 3 billion restructuring fund will be made available by Taiyi Shanglian, of which CNY 1.17 billion will be used to solve legacy debt issues, including paying off creditors of the assets to be retained, covering bankruptcy expenses and other restructuring costs. The remaining CNY 1.83 billion will be fully injected into Hozon, to be used as working capital to restart production and sales operations, reconstruct supply chains, and restore of after-sales networks and day-to-day operations.
Manufacturing equipment relating to the Neta L and Neta X SUV models are regarded as core operating assets to be retained, while equipment used for the production of the Neta S and GT sedans are seen as non-core assets that can be disposed of separately, leaving the automaker focused on SUV production.
The draft proposal sets out a three-stage recovery plan for Neta Auto, including an initial production start-up period, with a first-year sales target of 10,000 vehicles, prioritizing the start-up of Neta X production. Supply chains will be rebuilt and after-sales service networks reactivated, addressing the warranty claims of the existing 400,000 Neta owners.
The second stage involves the scaling up of the company’s operations with a targeted annual output of 300,000 vehicles, and the development of models specifically tailored for emerging markets in Asia, Africa, Latin America and other regions.
The third stage involves the development of new, global intelligent electric vehicle models, achieve an annual output value of CNY 40 billion, and preparations for an initial public offering (IPO).
