China’s HOZON Auto nets RMB120 million worth of credit line by mortgaging facilities

Shanghai (Gasgoo)- Zhejiang Hozon New Energy Automobile Co.,Ltd. (HOZON Auto), a Chinese EV startup, recently stated it has received a credit line worth RMB120 million from Shanghai Guojin Financial Leasing Co.,Ltd. (Guojing) by mortgaging the RMB42.66 million worth of facilities to the latter in January.

During the validity period of pledge (from Jan. 17, 2020 to Jan. 16, 2020), the ownership of the 40 units of facilities at the painting workshop of HOZON Auto's Tongxiang manufacturing base belongs to Guojin, while the Zhejiang-based EV manufacturer still has the right to use them, according to a update record from the business data platform Qichacha.

HOZON Auto said this is nothing but a normal financing behavior, which is expected to help the company decrease the percentage of fixed assets, so as to improve its capital liquidity.

（Photo source: HOZON Auto)

The startup has so far raised over RMB7 billion worth of capital, and wishes to collect roughly RMB3 billion for its ongoing Series B+ financing round, according to a local media report.

The company restarted operation on Feb. 10 after the Lunar New Year Holiday. Chairman Zhang Yunzhou and CEO Zhang Yong said in a letter written to mobilize employees that HOZON Auto will simultaneously combat the novel coronavirus epidemic and recover the production business to make sure that the Nezha U, its second mass-produced model, will go on sale as scheduled.

Reportedly, HOZON Auto kicked off in last April the preorder of the Nezha U EVs, which is set to hit the market in March 2020.