(Yicai Global) Jan. 17 -- China's new energy vehicle maker Yinlong Energy Co. faces a financial crisis with debts totaling more than CNY1 billion (USD155.3 million) in due payments to suppliers, a report claimed. The company's alleged troubles come only one year after it secured CNY3 billion financing from well-known investors and at a time when China's NEV industry debates overcapacity problems.
Its suppliers have been demanding payment from Yinlong, reported business weekly Caijing yesterday. The incomplete data from suppliers suggest that the company may have defaulted on debts totaling CNY1.2 billion, the report said, adding some suppliers have filed lawsuits against the firm and some employees of the suppliers even gathered at the gate of the company headquarters in Zhuhai, the southern Guangdong province, demanding repayment with a banner.
Part of the payment to suppliers has been held because the goods they provided had some infringement issues, about which the company made a filing with the ministry of public security, Sun Guohua, chairman of Yinlong responded to Caijing. However, general manager of a supplier said that these issues were only excuses of Yinlong for it to default on its debt.
Yinlong received investment from Dong Mingzhu, chairwoman of Gree Electric Appliances Inc. of Zhuhai, and five other enterprises including real estate giant Dalian Wanda Group Co. in return for a total of 22.3 percent share at the end of 2016. Zhuhai Yinlong unveiled A-Share listing plan last May. The disclosure at that time showed that Dong was the second-largest shareholder with a 17.46 percent stake.
After securing the investment, Yinlong has launched an expansion strategy, investing in the construction of new energy vehicle industrial parks in many cities. The total value of the new projects announced by the company since 2016 has amounted to CNY70 billion.