(Yicai Global) Oct. 19 -- Shares in Zotye Automobile surged by the exchange-imposed limit for two straight trading days when the struggling Chinese vehicle manufacturer said it is about to start making cars again after a three-year shutdown.

Zotye’s share price [SHE:000980] closed up 5 percent at CNY4.83 (USD0.67) today after jumping 5 percent yesterday as well. Firms at a risk of being delisted are only allowed daily stock fluctuations of a maximum of 5 percent, as opposed to the usual 10 percent.

Zotye has been relentless in its quest to begin manufacturing again, the Yongkang, southeastern Zhejiang province-based firm said yesterday. After many months of preparations, the first batch of T300 models will start rolling off the production line tomorrow.

Drowning in debt, the carmaker stopped making autos in the second half of 2019 as funds dried up. Parent firm Tech-New Group was declared bankrupt by a local court at the end of 2020, indicating that it was unable to further support Zotye. The firm racked up losses of CNY22.4 billion (USD3 billion) between 2019 and June 30 this year.

Zotye was bailed out by investment firm Jiangsu Shenshang Holding Group at the end of last year with a cash injection of CNY2 billion (USD277 million) in return for a controlling stake. Shenshang’s owner Huang Jihong, who is also chairman of car dealership Pang Da Automobile Trade Group, now controls Zotye.

The firm is also preparing to raise as much as CNY6 billion (USD831 million) through a private placement of shares to up to 35 investors, Zoyte said in a separate statement. The scheme was given the green light by shareholders yesterday. The proceeds will be used to fund its foray into new energy vehicles and to build up more sales channels.

Zotye will be keen to tap into China’s rapidly growing NEV market, which has strong government support. Electric passenger car sales more than doubled in the first nine months from a year ago to 3.8 million units, according to data from the China Passenger Car Association.

Editor: Kim Taylor