(Yicai Global) Dec. 10 -- CNY2.2 billion (USD345 million) of Chinese carmaker Borgward Auto’s assets have been seized by a Beijing court after the company failed to repay debts, according to shareholder Beiqi Foton Motor.

Thirty-four creditors asked the court to seize about CNY123.6 million (USD19.4 million) of Borgward’s assets, Beiqi Foton said in a statement late yesterday. The assets seized include machinery, office and information technology equipment, construction in progress and inventory, with a total book value of CNY2.2 billion. The holding period was not specified.

The assets are needed for production and operations, so will impact Borgward and adversely affect Beiqi Foton’s recovery of its related claims, the statement said.

Shares of Beiqi Foton [SHA: 600166] closed 3 percent lower at CNY3.60 (57 US cents) today, with a total market value of CNY23.7 billion (USD3.72 billion). The Shanghai market edged 0.2 percent lower.

Originally a German auto firm, Borgward went bankrupt in 1961 and was bought in 2014 by Beiqi Foton, a unit of Chinese state-backed carmaker BAIC Group. Due to poor performance, Beiqi Foton transferred a majority stake in Borgward to Chinese car rental giant Ucar in 2019. Ucar owns 75 percent, and Beiqi Foton the remainder.

Borgward’s situation continued to deteriorate after the deal. Rumors about its bankruptcy have been circulating this year, affecting Beiqi Foton’s performance. According to Beiqi Foton’s third-quarter earnings report, Borgward-related matters led to a net loss of CNY315 million.

Editor: Peter Thomas