Geely can save Lifan from ruin

Geely can save Lifan from ruin

June 23, 2020 0 By autotimesnews

According to a reputable agency, a Chinese company in financial difficulties may be absorbed by another auto giant – Geely.

As previously it became known Lifan is on the verge of ruin. To prevent the bankruptcy of a not so long ago popular brand, Zhejiang Geely Holding Group Co Ltd plans to become the main shareholder of Chongqing Lifan Holdings Ltd and invest in this company. However, details of a possible deal are not yet available: Geely refrained from commenting, and Lifan did not contact at all.

According to foreign sources, lacking liquidity Lifan may propose a restructuring of its debt to creditors with the sale of assets and the exchange of debt for shares, which it expects to complete by August 2020. In addition, it is reported that Geely “after the takeover is complete” intends to transfer part of its electric vehicle production business to the Lifan plant in Chongqing, which will undoubtedly have a beneficial effect on the local economy.

Reuters reports that Lifan’s debt in June 2019 was 31 billion yuan ($ 4.4 billion), while total assets were 41.5 billion yuan ($ 5.86 billion).