Foxconn’s partner Byton faces bankruptcy challenge
A creditor of Chinese electric car start-up Byton on Monday filed for bankruptcy of the ailing company, according to a local court filing.
A Shanghai-based software provider has asked the court to open bankruptcy proceedings for Nanjing Zhixing New Energy Vehicle Technology Development Co., or Byton, according to the court record. The court did not accept the petition as Byton seeks a settlement with the creditors, the company said in a statement.
Competition has intensified further in the Chinese electric vehicle market, with major electric vehicle manufacturers such as Tesla Inc. and state-owned NIO Inc. capturing shares during the recent market boom. EV startups that have long relied on equity financing to support cash-intensive research and development are more vulnerable to financial crises.
Byton has raised at least 8.4 billion yuan ($ 1.29 billion) from a group of investors including Tencent Holdings, Foxconn Technology Group and automaker FAW Group Corp. last June, according to the state-owned China Central Television.
Byton said in January that Foxconn would help manufacture its flagship M-Byte sport utility vehicle at its Nanjing plant, but no models have yet been produced.
Foxconn withdrew some of the staff sent to Byton after the Chinese state group FAW sought to increase its management control of the startup, deploying a former senior official to Byton as chairman earlier this month, according to Byton and FAW employees.
Byton, Foxconn and FAW did not immediately respond to a request for comment. Bloomberg first reported Foxconn’s exit.
In April, Byton’s German unit went bankrupt after failing to pay local workers’ salaries for months. Since last July, Byton has suspended its operations in China.
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