Shanghai court accepts WM Motor's bankruptcy application
WM Motor on Tuesday issued a notice on its reorganization bankruptcy application, stating that the company is taking self-help measures and that the court has already accepted the application.
In a notice released on the its official Weibo account on Tuesday afternoon, the Chinese electric vehicle manufacturer said that the Shanghai Third Intermediate People's Court had accepted its pre-reorganization application on October 7.
The decision came as WM Motor was facing operational challenges due to the impact of the pandemic, a downturn in the capital market, significant fluctuations in raw material prices, and difficulties in obtaining operational development funds, it explained.
However, the company noted that it remains determined to overcome these obstacles and expressed its commitment to not giving up.
In the notice, WM Motor emphasized that it still retains its commercial value, holds an intact governance structure, and possesses the fundamental capacity for independent negotiations, while some creditors have also expressed their willingness to participate in the reorganization process, which are the reasons why the court accepted its request.
The automaker sees the pre-reorganization process as an opportunity to thoroughly review its operations and business model. It aims to optimize various departments and business sectors, reduce costs, improve efficiency, and ultimately achieve sustainable development. An integral part of this process involves introducing strategic investors from around the world, it revealed.
The news of WM Motor's pre-reorganization application followed its recent decision to voluntarily terminate the reverse takeover (RTO) process with Apollo Holdings on the Hong Kong Stock Exchange. Just a day after this announcement, the US-listed Kaixin Auto Holdings revealed its non-binding letter of intent to acquire 100 percent of the equity held by WM Motor's shareholders.
These developments have raised questions about WM Motor's direction and leadership. Recent reports suggest that the company's founder, Shen Hui, has left the country. On September 10, Shen posted on his Weibo account that he was traveling to Munich and would then go to New York.
WM Motor, founded in 2012, is a Chinese electric vehicle manufacturer with a registered capital of 6 billion yuan (US$822.1 million). The company is wholly owned by Suzhou WM Intelligent Travel Technology Co Ltd.