A reorganization plan, the court-supervised process through which an insolvent company restructures its debts rather than liquidating, has been put forward for Hozon New Energy Automobile Company, the bankrupt Chinese parent of battery electric vehicle startup Neta Auto. The plan was circulated after a fourth creditors meeting held online on September 11. Under the draft, a newly formed company called Zhejiang Taiyi Shanglian Enterprise Management Partnership would invest CNY 3 billion (US$447 million) to acquire a 70.6% controlling stake in Hozon.
This is a draft proposal. Nothing has been signed.
Taiyi Shanglian was established earlier this year by two Zhejiang-based companies, Zhejiang Shanzi Holdings Company and Zhejiang Shanzi Yuxu Technology Company, specifically to pursue this transaction.
How the proposed CNY 3 billion would be used
Of the total, CNY 1.17 billion is earmarked to address legacy liabilities: paying off creditors on retained assets, covering bankruptcy expenses, and other restructuring costs. The remaining CNY 1.83 billion would flow directly into Hozon as working capital, intended to restart production, rebuild supply chains, and restore day-to-day operations and after-sales networks.
The draft also distinguishes between which manufacturing assets would be kept and which could be sold off. Equipment for the Neta L and Neta X SUV models is classified as core. Equipment for the Neta S and GT sedans is classified as non-core and could be disposed of separately. In plain terms, if the plan moves forward, the company would emerge as an SUV-focused business.
What the draft projects beyond year one
The recovery plan sets out three stages. The first targets sales of 10,000 vehicles in year one, prioritizing the Neta X, and calls for addressing warranty obligations for roughly 400,000 existing Neta owners.
The second stage, per the draft, targets annual output of 300,000 vehicles, with new models aimed at markets in Asia, Africa, and Latin America. The third projects annual output value of CNY 40 billion and includes preparations for an initial public offering, the term for a company's first sale of shares to public investors.