China's Human Horizons seeks up to $42 mln in debt financing to revive EV production

China Evergrande New Energy Vehicle

12/08/2024 13:07

BEIJING, Aug 12 (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)
 ((qiaoyi.li@thomsonreuters.com;))