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The trigger for the capital fracture of a new force has been exposed.

2024-04-22 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)09/18 Report--

According to China Business News, a former employee of Aichi Automobile Co., Ltd. said on Sept. 16: "We are still planning a MPV in the second half of last year, the company launched the 'Thousand talents recruitment Program', and more outlets are being built in China. Everything seems normal, and even the year-end bonus is normal at the beginning of this year. But all of a sudden, the capital chain is broken. "

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As for why Aichi Motor is suddenly in a financial predicament? According to people familiar with the matter, the direct trigger was thunder, the investment agency where former chairman Chen Xuanlin worked, which blocked access to external financing for Aichi. In addition, people familiar with the matter said: "Aichi overseas still has more than 100,000 outstanding orders, we are currently experiencing difficulties, but if we can have funds to come in later, we still have a chance to survive."

Since March this year, Aichi has been in a financial crisis. Many times there have been negative information such as wage arrears, office arrears and rent withdrawal, and employees have to pay their own social security. at the same time, due to financial problems, the entire operation of Aichi has been almost paralyzed, including several sections of Aichi App have been emptied; maintenance service packages, vehicle lifetime warranty rights, discharge guns and many other services have been unable to use normally, headquarters office rental, headquarters building is empty, and so on.

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Data show that Aichi Automobile was founded in February 2017. it is one of the early new car-building brands in China. Founder Fu Qiang has served as head of Skoda Division of Shanghai Volkswagen, Executive Vice President of sales and Marketing of Beijing Mercedes-Benz, President and CEO of Volvo Automobile China sales Company, and has rich experience in the automotive industry.

Fu Qiang left Volvo in 2016, founded Aichi the following year, and invited Gu Feng, then chief financial officer of SAIC, to join him. Aichi launched its first production model, the Aichi U5, in December 2019, but failed to stir up waves in the market after the launch of the new car, with sales of 2600 and 3011 cars respectively from 2020 to 2021, according to data. Poor sales have also led to successive losses, with operating income of 479 million yuan in 2020 and 686 million yuan in 2021, and net losses of 1.597 billion yuan and 1.623 billion yuan, respectively. As of December 31, 2021, Aichi car currency cash is only 54.64 million yuan, and the total debt is 3.359 billion yuan.

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As cash flow dries up, Aichi likes to raise a key amount of financing. On November 30, 2021, Shanghai Dongbai Industrial Group Co., Ltd. (hereinafter referred to as "Dongbai Industry"), which is actually controlled by Chen Xuanlin, signed an Investment Framework Agreement with Aichi Automobile, which intends to increase its capital by 2.5 billion yuan.

In January 2022, Aichi received hundreds of millions of dollars in strategic financing from Chen Xuanlin and his holding company Dongbai Group, followed by a change in Aichi's top management. In July of the same year, Aichi founder Fu Qiang stepped down from the post of legal representative and chairman, and Chen Xuanlin took over the post. In short, Aichi founder Fu Qiang officially "exited" the post of chairman and was taken over by investors. In addition, the company's CEO was also changed to Zhang Yang.

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According to first Finance, the capital increase of Dongbai Industries reached 1.41613 billion yuan through "Aichi Automobile Direct financing Plan Series 1-8" issued by Shanghai Beigang Private Equity Fund Management Co., Ltd., 460.23 million yuan in short-term loan contracts, 317 million yuan in equity financing from investors, and 306.64 million yuan in foreign direct investment. Of this total, 202.5 million yuan was transferred in the name of repayment of loans from April to August 2022, and the actual financing reached 2.2975 billion yuan. In the process of capital increase and payment of Dongbai Industry, Aichi Automobile carries out new product research and development, channel construction and other work. And it plans to complete the reverse merger through the merger with Huaxia Burson, an educational and training enterprise, so as to realize the listing of US stocks.

In October 2022, Aichi officially launched its second production model, U6, which was launched in April 2021 and was originally scheduled to be delivered in October of the same year, but was delayed due to funding problems. However, this round of financing is not very smooth, and it is this round of financing that lays the groundwork for Aichi's current predicament.

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In November 2022, the management team of Aichi Automobile changed again. Chen Xuanlin stepped down as chairman, and the legal representative of Aichi Automobile Co., Ltd. changed from Chen Xuanlin to Zhang Yang. at the same time, Chen Xuanlin resigned as chairman of the company and continued to serve as a director. Zhang Yang is the chairman of the board. In view of this change, an online fund company announcement disclosed: "due to Chen Xuanlin's personal reasons, there is uncertainty in the operation and management of the financing side, and the principal and interest of some products have not been paid on schedule." According to media reports at that time, Chen Xuanlin himself was also stranded overseas, his shares in Aichi car were also frozen, and the tight capital chain of Aichi car also appeared.

According to public data, since March 2023, Chen Xuanlin has been listed by the court as an executor twice; five times as a person subject to execution, with a total amount of about 1.3 billion yuan; and his equity in different enterprises has been frozen 15 times, totaling 2.4 billion yuan. According to people familiar with the matter, most of the 2.2975 billion yuan capital increase received by Aichi Automobile in 2022 was used to repay the suppliers, and 202.5 million of the remaining amount was transferred in the name of repaying the loan, and another 2.5 billion yuan of the financial consultant fee of the capital increase was paid 250 million yuan. The credit granting of Aichi Automobile Bank was blocked by the Chen Xuanlin case.

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Tianyan survey shows that since its establishment, Aichi has experienced nine rounds of financing, and there is no lack of well-known investors such as Ningde Times, DiDi, Tencent Investment and other well-known investors. according to the publicly disclosed capital quota, the total financing has reached nearly 10 billion yuan. During the financing period, Aichi launched its second production car, but the launch of the new car also failed to reverse the decline in Aichi's sales, which totaled 753 in 2022. In addition, although Aichi's operating income increased in 2022, the net loss was 1.023 billion yuan, which still exceeded its income. As of December 31, 2022, the currency cash is only 128 million yuan.

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After entering 2023, the operating condition of Aichi has been not optimistic. Since March, the cash flow of Aichi has been broken. In July, Aichi issued a notice on the appointment of the company's CEO and CFO. Aichi Automobile said that Zhu Xiaohua was appointed as the CEO of the company, responsible for the daily operation and management of the company, the appointment date is from July 18, 2023, and Tang Meiyu is appointed as the company's financial director, responsible for the financial management of the company, the appointment date is from July 18, 2023. In addition, Aichi Automobile employees also received a notice on the establishment of a temporary working group on shareholder governance sent by the Human Resources Department, led by Zhu Xiaohua, the representative of the management, and Fu Qiang, the founder, to actively carry out preparations for the resumption of work and production. However, at present, Aichi Shangrao base is still in a state of suspension.

As of press time, the Aichi official did not respond to the above report.

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