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Lin Mingjun, CEO of Happy car: I don't think Weima Shenhui has run away.

2024-06-19 Update From: AutoBeta autobeta NAV: AutoBeta > News >


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Since Weimar filed for bankruptcy review, the follow-up direction of Weimar has also attracted the attention of people inside and outside the industry.


Recently, Lin Mingjun, founder of Happy Motor, who announced the merger and acquisition of Weimar, revealed some of the latest progress with Weimar in an interview with the media. Lin Mingjun said that the merger and acquisition of Weima is still on a normal track, but a new link has been added, which is that Weima itself has been pre-restructured through the court, and the process will certainly take time.

As for the recent news on the market, it is said that Weimar Shenhui went abroad and other news. Lin Mingjun responded: everyone said that Shen Hui had run away, and he did not think he had run away. We still communicated normally and discussed with the Weimar team how to solve the problem. In the future, if we are going to acquire Weima and let Kaixin Motor run the new company, will the Weimar brand not exist? Lin Mingjun said: Weima brand will continue to exist, after all, Weima has a lot of advantages. Weimar has sold about 140000 cars and has a good influence in the industry, but it is said that word of mouth has been affected by this situation recently. The legacy of history can not be overturned, at least Weimar still has influence.


Relevant data show that: on September 11, Happy Motor announced that it had signed a non-binding letter of intent with Weimar Motor, and planned to issue a certain number of new shares to acquire 100% of its shareholders. Happy Automobile was founded in 2015, formerly known as Renren Automobile, is the domestic Gao Guang used car Dealer Group under Renren. In 2015, Kaixin Automobile entered the used car industry with auto finance business, opened used car retail business in 2017, and focused on used car trading services, becoming one of the used car dealers in China. In May 2019, Happy Motor listed on NASDAQ through SPAC, becoming the second successful second-hand car company in China after Youxin. In August this year, Kaixin Automobile completed the acquisition of Morningstar Motor Company and officially entered the field of new energy vehicle manufacturing.


Weimar Automobile, as a new force of head car building, the starting point is not low. In terms of financing, according to incomplete statistics of its cumulative financing of 12 rounds, the amount of financing is as high as 40 billion, behind there are many investors such as Tencent Investment, Baidu, Sequoia Capital China and other giant enterprises. However, after entering 2020, or due to fierce market competition, their own products are insufficient. Weimar began to go downhill and has since been marginalized. Relevant data show that Weimar sold 44000 vehicles in 2021. For comparison, Wei Xiaoli's three car companies all sold more than 90,000 vehicles in the same year, more than double that of Weimar.


Sales are falling and losses are increasing. Relevant data show that Weimar lost 17.4 billion yuan from 2019 to 2021. By the end of 2021, Weimar's total debt reached 40.6 billion yuan. As of March 31, 2022, Weimar had only 3.678 billion yuan of cash and cash equivalents left on its books. Starting from the second half of 2022, Weimar was exposed to cash flow problems, resulting in behind the production, sales, services and other links have been affected. To this end, in November 2022, Weimar began layoffs and pay cuts, but the situation did not improve. Starting from 2023, the Weimar car factory was completely shut down, and the headquarters was recovered for a long time in arrears of rent, forcing employees to work from home.


In January, Apollo announced plans to buy Weimar Holdings Ltd for $2.023 billion. According to the plan, Weimar will receive three temporary financing totaling 2 billion yuan to supplement cash flow and operating capital. A backdoor listing has also been a lifesaver for Weimar, but on Sept. 8, Apollo announced that the parties concerned had agreed to terminate the Weimar agreement, so the acquisitions and placements would not take place. On September 10, Weimar issued a statement saying that it would voluntarily terminate its cooperation with Apollo. The failure of this cooperation also means that Weimar's hope of backdoor listing has been dashed. However, just after the failure of the cooperation with Apollo, Weimar welcomed the happy car again a few days later.


When we return to happy cars, the situation is also not optimistic. On March 29, Kaixin Motor said it had received a notice from NASDAQ that the closing price of its shares did not meet the minimum price requirement of NASDAQ ($1) and would face delisting. After Kaixin announced that it had signed a non-binding letter of intent with Weimar, Happy Motor closed up 0.66% at $0.26, still below the Nasdaq's minimum share price requirement. Industry insiders pointed out that the market funds may not be recognized for the acquisition of Weimar.

In addition, as the other side of the cooperation, Happy Motor's financial results in recent years have also been a mess. According to relevant data, the net loss of Happy Motor in 2022 is larger than its revenue. In 2022, its revenue was $82.84 million, and the net loss was as high as $84.706 million. Against this background, many people in the industry are not optimistic about the cooperation between the two sides. after all, the ability of both sides of the "weak and weak alliance" is very limited, and it is very difficult to achieve great results in the short term. In addition, due to the non-binding nature of the letter of intent signed by both parties, there are still some variables in the cooperation between the two sides.

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