(Yicai) Nov. 26 –Dayun Auto said the Chinese carmaker is reshuffling its new energy vehicle business after encountering temporary liquidity difficulties with its working capital amid the impact of the cyclical market environment.
Dayun Auto’s assets-to-liability ratio is still at a normal level in the industry, the Yuncheng-based company announced yesterday. The restructuring will be carried out in accordance with legal procedures to ensure all parties’ interests and rights, it added.
Dayun Auto has contacted various investment institutions for strategic cooperation to advance its orderly restructuring, it noted. Factories and research and development bases are preparing to resume work, ensuring product delivery and after-sales services, it said.
Operation at various NEV plants of Dayun Auto will gradually resume after some time, a source from parent firm Dayun Group told Yicai. The restructuring will not affect the unit’s heavy-load truck and other commercial vehicle businesses, the person added.
Last month, a spokesperson of Yuanhang Auto, the electric vehicle brand of Dayun Group, confirmed to Yicai that it is carrying out strategic adjustments. Executives and mid-level employees are still at their posts, with operations to return to normal after adjustments are completed, the person added.
Yicai had learned from insiders that Yuanhang is experiencing financial strains due to a highly competitive market. As a result, the company launched layoffs, delayed salary payments, cut wages, and closed stores in Beijing and Haikou while actively seeking assistance from local governments and new financing.
On Nov. 19, the Intermediate People’s Court in Yuncheng accepted a bankruptcy and restructuring application filled by a small and medium-sized auto parts firm from Jiangsu province against Dayun Auto. However, Dayun Group told Yicai that the subsidiary is not bankrupt.
Editors: Shi Yi, Martin Kadiev
