(Yicai) March 20 -- Hozon New Energy Automobile, which owns electric vehicle brand Neta, has denied rumors that the Chinese carmaker has disbanded its research and development team.

"The recent rumors about the dissolution of Hozon Auto’s R&D team are false," the Shanghai-based company’s legal department said on social media platform Weibo yesterday. "We are further cutting costs and improving efficiency through organizational and business optimization.”

According to the online rumors, the R&D team would be fully disbanded by May 30. The marque has about 1,700 employees at the moment, around 200 of whom are in the process of leaving.

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

During the meeting, Hozon Auto also denied the R&D team rumors and pledged to work with suppliers to explore self-rescue plans, according to 21st Century Business Herald.

Last August, Hozon Auto engaged with potential investors to raise CNY3 billion (USD410 million) at the end of this month. The firm clarified last month that the fundraiser was a Series E round worth CNY4 billion, and at yesterday’s meeting said it had been postponed to next month.

Hozon Auto owes suppliers nearly two-thirds of its total liabilities, which are close to CNY10 billion (USD1.4 billion), according to 21st Century Business Herald. The potential new investors are likely waiting for the carmaker to reduce its liabilities before jumping onboard.

Hozon Auto went through a couple of large-scale layoff rounds at the end of last year. According to data from the China Passenger Car Association, its sales halved to 64,500 units last year from 2023. In January, it sold just 110 vehicles.

Hozon Auto’s three Chinese factories in Tongxiang, Nanning, and Yichun have been shut down.

Editor: Futura Costaglione