Beijing Borgward files for bankruptcy
Beijing (Gasgoo)- Beijing Borgward officially filed for bankruptcy to the First Intermediate People's Court of Beijing Municipality on April 8th, according to its parent company Foton’s announcement.
Photo credit: Beijing Borgward
The announcement explained that Beijing Borgward has been suffering from continuing losses generated by poor operations since its establishment. The company has been facing a severe financial crisis, with a capital chain rupture, causing its inability to recover from the situation and resume production. The company was drained to pay off its outstanding debts, and its current assets are not enough to settle the debts. Therefore, Beijing Borgward has officially filed for bankruptcy.
Beijing Borgward was founded in 2016 and is currently owned by Shenzhou Youche (Xiamen) Information Technology Co., Ltd. at the majority stake of 75.2065% and BAIC’s Beiqi Foton Motor Co., Ltd. with a 24.7935% stake.
The bankruptcy was not surprising to the industry, as earlier in June 2021, Beijing Borgward was already considering the possibilities. In October 2021, the company received a court-ordered seizure for its RMB2.2 billion worth of assets, petitioned by creditors.
The incident will also hit Foton Motor as its shareholder. Foton Motor said that it is projected to see its 2021 annual profits decrease by RMB5.326 billion ($836.26 million).
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