(Yicai) March 27 -- A total of 134 suppliers of Hozon New Energy Automobile have pledged to support the debt restructuring plan of the Chinese carmaker owner of electric vehicle brand Neta.

Battery giants Contemporary Amperex Technology and Gotion High-Tech, automotive smart connected products developer Beidou Intelligent Connected Vehicle Technology, automotive light emitting diode designer Luye Auto Lighting, and 130 other suppliers agreed to convert over CNY2 billion (USD276 million) of Hozon Auto debts into equity, the Shanghai-based automaker announced yesterday.

The debt-to-equity swap plan aims to support Hozon Auto's debt restructuring and financing, facilitating a swift restart of production, backing overseas expansion, and establishing long-term strategic partnerships, the firm added. However, it did not specify the timeline for output resumption.

"Over the past decade, Hozon Auto has accumulated nearly 500,000 users and entered over 40 countries and regions, becoming a major player in both the Chinese and global new energy vehicle markets," Hozon Auto said. "In today's thriving NEV sector, we believe our products remain competitive, as we still stand out in technology and brand value, with substantial room for growth."

On March 19, Hozon Auto held a debt restructuring meeting with more than 100 suppliers at its headquarters, 21st Century Business Herald reported the following day. The firm proposed to convert 70 percent of its debt into equity and repay the rest in three cash installments without interest. Many suppliers were said to have accepted the offer.

Hozon Auto has faced several challenges since last year, including store closures, wage arrears, supplier payment disputes, and the dissolution of its research and development team. Its three Chinese factories in Tongxiang, Nanning, and Yichun have been shut down.

In 2024, Hozon Auto logged a net loss of CNY4.5 billion, with total liabilities nearing CNY10 billion (USD1.4 billion), of which 60 percent to 70 percent are supplier payments.

On March 22, Hozon announced it received a THB10 billion (USD2.2 billion) credit facility from Thai financial institutions to begin production in the country by July. The carmaker plans to release affordable models, such as the Neta X, in Southeast Asian markets.

Hozon Auto's sales plummeted 49 percent to about 64,500 units last year from the previous one. It sold only 487 units in the first two months of this year.

Editor: Futura Costaglione