(Yicai) May 20 -- Troubled Chinese electric carmaker HiPhi has started to restructure after securing USD1 billion of investment from iAuto Group, following a three-month production halt.

Under their deal, iAuto will provide the funding to Human Horizons Technology, which owns the HiPhi brand, the US carmaker said on May 16. With iAuto’s financial, technical, and other support, the Shanghai-based firm has started to rebuild its teams and resume production.

HiPhi announced that it would stop production for six months on Feb. 18, with Chairman Ding Lei saying the automaker had just three months to save itself and vowing to make every effort.

“IAuto will fully support HiPhi's plan to resume business operation and vehicle production,” it said. “The transaction will set a precedent of restructuring initiatives for the Chinese auto industry.”

The pair inked the rescue package on May 10. It encompasses manufacturing collaboration for the fulfillment of sales orders, equity merger and acquisition, technical cooperation, brand, and international sales alignment, integration of supply chain and production.

Set up and registered in Delaware, iAuto is owned by Yang Rong, a Chinese investor and founder of China's first overseas listed company Brilliance Auto. Yang contributed to establishing Chinese joint venture BMW Brilliance and later set up Hybrid Kinetic Motors in the United States.

Lei, a former executive at Chinese auto giant SAIC Motor and the vehicle arm of video platform Leshi, set up Human Horizons in 2017. Three models have been launched under the HiPhi brand, which has so far failed to achieve a breakthrough in sales.

Editor: Martin Kadiev