China’s Hozon New Energy Automobile, the owner of electric vehicle brand Neta, has entered bankruptcy reorganization proceedings.
The National Enterprise Bankruptcy Information Disclosure Platform updated its information about Hozon Auto's bankruptcy case on June 13, adding Zhejiang Zicheng Law Firm as the administrator, along with other key management personnel, indicating that the company has officially entered bankruptcy.
On May 13, the NEBIDP issued a notice that Chinese advertising agency Shanghai Yuxing Advertising had filed a bankruptcy review case against Hozon Auto and that the case was being handled by a court in Jiaxing, Zhejiang province.
A restructuring statement from Neta claiming Hozon Auto had entered bankruptcy started circulating on Chinese social media on June 12. However, a representative from Hozon Auto said the day after that the statement was not officially released and that they could not confirm its authenticity.
According to the statement, Hozon Auto would collaborate with leading domestic and international industrial capital firms for joint investments, with funds earmarked for resuming production, technological research and development, and overseas market expansion, under the supervision of the High People's Court of Zhejiang Province.
The statement also claimed that, under the restructuring plan, Hozon Auto would optimize and restructure its original management team while bringing in senior executives with multinational automotive management experience, like the new chief executive officer.
Moreover, the statement said Hozon Auto will ensure continued domestic and international operations, with production in Tongxiang and other locations expected to gradually resume within months. Overseas operations would remain unaffected, with key international markets, including Thailand, Indonesia, and Brazil, remaining development priorities.
On June 11, Hozon Auto's Chairman and CEO Fang Yunzhou was reportedly blocked in his office by employees demanding back pay. The above representative explained that Fang left his office under police escort, and his whereabouts are known.
"The company's situation is quite chaotic right now, and we still need someone to take charge," the Hozon Auto representative noted.
According to the listing prospectus filed by Hozon Auto to the Hong Kong Stock Exchange in June last year, the firm accumulated net losses of over CNY18.3 billion (USD2.5 billion) from 2021 to 2023. In recent years, Hozon Auto has been reported several times to have conducted large-scale layoffs, salary cuts, delayed supplier payments, and production shutdowns.
