Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Li Ka-shing files bankruptcy petition against electric carmaker chief

Li Ka-shing files bankruptcy petition against electric carmaker chief

Hong Kong billionaire Li Ka-shing, known for his prescient and successful investments in industries ranging from property to infrastructure, has hit a speed bump as far as his foray into the electric-vehicle sector is concerned. Li’s investment in Hong Kong-listed FDG Electric Vehicles has shrunk by more than 40 per cent in value. Stock of We Solutions, another firm Li has invested in, drops 1.1 per cent on Monday.

Hong Kong billionaire Li Ka-shing, known for his prescient and successful investments in industries ranging from property to infrastructure, has hit a speed bump as far as his foray into the electric-vehicle sector is concerned.

His four-year-old investment in FDG Electric Vehicles, a Hong Kong-listed Chinese maker of new-energy vans and buses, has shrunk by 42 per cent in value. Over the weekend, he filed a bankruptcy petition against Cao Zhong, FDG’s chairman, through his foundation in Canada.

Shares of FDG, which is based in the eastern Chinese city of Hangzhou, tumbled 29 per cent to 26.5 HK cents on Monday, extending its losses to 73 per cent this year. FDG was unable to assess the impact of Li’s petition on the company as the petition was still at a preliminary stage, it said in an exchange filing with the Hong Kong bourse.

Li now holds a 2.1 per cent stake in FDG, as its fourth-largest shareholder, while Cao has a 4.1 per cent stake and is FDG’s third-largest shareholder. Li bought 743 million shares of FDG for 46 HK cents apiece in 2015, valuing the deal at HK$341.8 million (US$43.6 million).

FDG has been unprofitable over the past few years and its business has worsened recently amid headwinds facing the industry, such as an economic slowdown in China and the government’s scaling back of subsidies on new-energy vehicle purchases. It posted a net loss of HK$1.99 billion for the financial year ending in March, after a loss of HK$2.23 billion for the previous year.


 Superman Li's FDG gamble

The company acknowledged its financial difficulties in its annual report and said it had defaulted on a couple of bank loan repayments, and that it was negotiating with debtors to convert debt into equity and had asked the government for help. One of its subsidiaries, Hangzhou Changjiang Automobile, had even stopped paying employees, the National Business Daily reported in July.

China’s electric-car market, the world’s biggest, is reeling from the partial withdrawal of government subsidies. Sales dropped 4.7 per cent and 16 per cent from a year earlier, in July and August, respectively, after an average 60 per cent cut in subsidies this year. Annual sales had increase at 51 per cent over the past two years.

Another of Li’s investments, in We Solutions, a Hong Kong-based maker of new-energy cars, has not fared well either, with its share price below levels Li bought at in May. Li invested in We Solutions at 51 HK cents a share through a unit of Agile Group Holdings. The stock declined 1.1 per cent to 46.5 HK cents on Monday.

Li is the richest businessman in Hong Kong, with a net fortune of US$28.1 billion, according to Bloomberg.

There is mounting concern Beijing has created an electric-vehicle bubble that may be about to burst. Total sales fell for the first time in July after the government scaled back its subsidies. Deliveries dropped again last month, raising doubts that one of the final pillars of strength in China’s broader car market, which has fallen in 14 out of the past 15 months, is wavering.

Shanghai-based Nio is poised to report on Tuesday that it lost another 2.6 billion yuan (US$369 million) during the second quarter, according to the average of two analyst estimates. That would bring accumulated losses at the company to about US$5.7 billion since William Li Bin founded the carmaker in 2014.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
×