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HiPhiThe parent company Human Horizons (Jiangsu) Technology Co., Ltd. (hereinafter referred to as Human Horizons) applied for bankruptcy reorganization. Recently, the People's Court of the Economic and Technological Development Zone of Yancheng, Jiangsu Province made a decision to agree to start the judicial pre-reorganization of Human Horizons. In response, HiPhi said that there are serious problems with the statements made by some self-media and media reports on the Internet. "Judicial pre-reorganization" is not "bankruptcy reorganization" nor "bankruptcy liquidation."

According to the announcement of the recruitment of investors for the common benefit bonds in the pre-reorganization case of Human Horizons, in order to ensure the after-sales service of the vehicles sold and to start the resumption of work, production and sales, the total amount of common benefit bonds is expected to be no more than 300 million yuan. In addition, on August 11, the announcement of the claim declaration of the pre-reorganization case of Human Horizons stated that creditors can declare their claims to the interim administrator before September 30, 2024.

Court: The new energy vehicle industry has broad prospects and pre-reorganization value

The court's decision mentioned that on July 1, 2024, the applicant Human Horizons (Jiangsu) Technology Co., Ltd. (hereinafter referred to as Human Horizons Company) applied to the court for reorganization of the company and pre-reorganization at the same time on the grounds that its assets could not repay all due debts, but it had reorganization value and reorganization possibility. After the court accepted the case on August 8, 2024, it formed a collegial panel to review it in accordance with the law.

The court found that Human Horizons was registered and established on September 13, 2017. The company type is a limited liability company. The registration authority is the Administrative Approval Bureau of Yancheng Economic and Technological Development Zone. The registered capital is 1 billion yuan. The legal representative is Ding Lei. The current registered shareholders are Human Horizons Holdings (Shanghai) Co., Ltd. (holding 80%) and Jiangsu Yueda Automobile Group Co., Ltd. (holding 20%).

The court found that as of April 30, 2024, Human Horizons' known unpaid debts exceeded the company's total assets, and its assets were insufficient to repay all debts, which had already met the grounds for bankruptcy. In order to solve the company's current predicament, the applicant submitted a reorganization feasibility analysis report. The court notified some known creditors of the debtor's application for bankruptcy pre-reorganization and sought the opinions of the local competent authorities and major creditors.

The court held that Human Horizons' business involves the research and development and production of new energy vehicles, autonomous driving, cloud computing, etc. The new energy vehicle industry in which it is located has broad prospects. Pre-reorganization will help improve the efficiency of corporate reorganization, reduce corporate reorganization costs, and give full play to the role of the reorganization system in saving troubled companies and better protect the legitimate rights and interests of creditors. The debtor has pre-reorganization value and meets the pre-reorganization conditions.

The decision letter states that the pre-reorganization period is six months from the date of the decision. If there is a legitimate reason, it can be extended for three months upon application by the pre-reorganization administrator.

This means that HiPhi’s pre-restructuring period will be up to nine months.

HiPhi Auto: “Judicial pre-reorganization” is not “bankruptcy liquidation”

Regarding HiPhi Auto’s official entry into judicial pre-reorganization, HiPhi Auto issued a “Letter to HiPhi Car Owners” on August 9th in response, saying that there are serious problems with the statements made by some self-media and media reports on the Internet. “Judicial pre-reorganization” is not “bankruptcy reorganization”, let alone “bankruptcy liquidation”.

The pre-reorganization system can give full play to the management and control of the enterprise to be restructured. Through the consultative autonomy of the common interests of the enterprise and all related parties under legal protection, it can help enterprises in difficulties to find more effective solutions for "rebirth" as soon as possible through self-help.

The judicial pre-reorganization process can effectively save time and costs, pool the resources and funds of all stakeholders, and improve reorganization efficiency.

The most crucial thing is that pre-reorganization can "enter" through agreement reorganization and dispose of debts in batches according to a uniform plan; "exit" can exit the procedure at any time, which has great flexibility and compliance in resolving debts and achieving restructuring.

HiPhi Auto stated that this judicial pre-reorganization is an important turning point to gradually resolve HiPhi Auto's current predicament. It is also a key step for the government, courts, shareholders, and potential investors to recognize the value of HiPhi Auto, and to push Human Horizons to resolve creditor issues under the intervention of judicial effectiveness, and to form a restructuring and regeneration plan that is in the common interests of all parties as soon as possible.

Judicial pre-reorganization is the first step. After reaching an agreement on judicial pre-reorganization, HiPhi will conduct judicial reorganization. In this way, the agreement between HiPhi and its creditors can be locked, and the company will officially get back on track.

In response to the question "Does HiPhi have to wait until the reorganization process is completed before it can start? Six months? Nine months?" HiPhi Auto responded that after the reorganization process is launched, the first thing to be achieved is the normalization of user after-sales service, and the second is the parallel advancement of "reorganization without stopping production". With the strong support of the government and all shareholders, and under the protection of the law, HiPhi Auto will conduct in-depth and effective communication with relevant potential investors, actively negotiate with creditors and investors, and promote early resumption of production. This will also help the company get back on track as soon as possible.

Human Horizons interim administrator: plans to borrow 300 million yuan from common benefit bond investors

On August 11, the Shanghai branch of JunHe Law Firm, the provisional administrator of the pre-reorganization of Human Horizons, issued a notice on the declaration of claims in the pre-reorganization case of Human Horizons. Creditors can declare their claims to the provisional administrator before September 30, 2024.

On August 10, the "Announcement on the Recruitment of Investors for the Common Benefit Bonds of Human Horizons (Jiangsu) Technology Co., Ltd. Pre-reorganization Case" was also released. The content shows that the recruitment of common benefit bonds is a debt incurred for the continued operation of Human Horizons Jiangsu Company. The funds provided by common benefit bond investors are specifically used by Human Horizons Jiangsu Company to ensure after-sales service for sold vehicles and to resume work, production and sales. It is estimated that the total amount of common benefit bond loans will not exceed 300 million yuan, with the first installment of 100 million yuan, and the return on investment (simple interest) will not exceed 8% annualized.

In addition, the announcement also clarified the recruitment conditions, registration period and related procedures for common benefit bond investors. The registration period ends at 18:00 on August 31, 2024.

According to previous reports, the luxury pure electric car brand HiPhi was caught in a shutdown storm at the beginning of the year. On February 22, HiPhi responded that in the face of numerous internal and external pressures and challenges, the company has made major adjustments to its daily operations since February 19, and is currently taking all possible measures to alleviate its difficulties.

According to the data from the Car Owner Guide, HiPhi Auto sold a total of 272 vehicles in 2024, includingHiPhi Y156 units sold,HiPhi X、HiPhi ZThere are 31 and 85 vehicles respectively.

According to the risk information on the Qichacha APP, Human Horizons has become the person subject to enforcement, with a total amount of approximately RMB 2.7893 million. The company is currently involved in more than 160 judicial case information. In addition, the company's legal representative, Ding Lei, is currently associated with a total of 5 restricted consumption information, with a total amount of approximately RMB 185,200.

According to Tianyancha App, Human Horizons Holdings (Shanghai) Co., Ltd. also has multiple risk information. In May this year, the company was listed as a dishonest debtor (deadbeat). In addition, the company and its chairman Ding Lei have been restricted from high consumption many times.

Tianyancha App shows that recently, HiPhi (Qingdao) Automobile Sales and Service Co., Ltd. was listed in the abnormal operation list because it could not be contacted through the registered residence or business premises. The legal representative, chairman and general manager is Ding Lei, and it is wholly owned by HiPhi Automobile's affiliated company Human Horizons Investment Co., Ltd. In addition, HiPhi (Zhongshan) Automobile Sales and Service Co., Ltd. and Nanchang HiPhi Automobile Sales and Service Co., Ltd. Nanchang Honggutan District Branch, both subsidiaries of the Qingdao company, were also listed in the abnormal operation list because they could not be contacted through the registered residence or business premises.

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Text/Beijing Youth Daily reporter Song Xia

Editor/Fan Hongwei