(Yicai Global) Aug. 16 -- WM Motor has denied speculation that the Chinese electric carmaker may invest in Zotye Auto, whose insolvency restructuring is set to begin in readiness for a backdoor listing.

“This is fake news,” the Shanghai-based automaker told Yicai Global. “WM Motor has no interest in participating in Zotye's restructuring.”

The rumor could be based on the fact that a unit of Shanghai Dezhao Automobile Technology, whose legal representative is WM Motor's co-founder and Chief Executive Du Ligang, has been confirmed by Zotye Auto to be taking part in the restructuring.

Hunan Zhibozhiche Equity Investment Partnership is another of the three investors that submitted materials to take part, Zotye Auto’s Aug. 13 statement said. Hu Bianjiang, general manager of Zhejiang Geely Automobile's Hunan province, Xiangtan-based unit, indirectly owns about 38 percent of Zhibozhiche.

WM Motor applied for an initial public offering on Shanghai’s Nasdaq-style Star board on Jan. 29, according to the securities regulator.

But the firm has since halted the plan due to the low ratio between research and development spending and revenue and continuous losses, Sina Tech reported in April, citing people familiar with the matter. It responded by saying listing preparations were progressing in an orderly manner.

WM Motor sold 15,600 vehicles in the first half of this year, far below Nio's 41,900, Xpeng Motor's 30,700 and Li Auto's 30,200.

Zotye shares [SHE:000980], which are the subject of a delisting warning and are in ‘special treatment’ because of the firm’s massive losses, surged by the 5 percent exchange-imposed limit for a third straight day to close at CNY8.20 (USD1.27).

Editor: Futura Costaglione