Xia Yiping, who has served as CEO of Jidu Automobile and CEO of Jiyue, is leading the introduction of new investors to promote the bankruptcy and reorganization of Jiyue. In this process, Baidu, the founder of Jidu and one of the major investors, is seeking to withdraw. The investors Xia Yiping seeks to introduce are mainly from the Middle East.
The above announcement also stated that Shanghai Jidu Automobile Co., Ltd. will maintain the smooth operation of its core business and protect the legitimate rights and interests of users in accordance with the law under the supervision of the interim manager.
People familiar with the matter claimed,Jiyue does currently retain a small-scale team that maintains low-power operation, mainly serving software updates and after-sales services. However, Xia Yiping is not currently involved in actual business operations. His focus is on handling Jiyue's bankruptcy and reorganization, including communication with shareholders and creditors, and negotiations with new investors.
The biggest problem in Jiyue's bankruptcy and reorganization comes from the huge scale of debt - according to media reports, it may be as high as 7 billion. However, with the coordination of relevant departments, Geely and Baidu, Jiyue's largest shareholders, jointly resolved the issue of employees' salary arrears and layoff compensation, and a small number of suppliers and partners also received their arrears. A person in charge of a company that has provided advertising services to Jiyue confirmed that they received Geely's payment for Jiyue cooperation services, which was about 60% of the original contract amount, and the two parties reached a contract termination agreement.
It is currently impossible to confirm Jiyue's debt repayment scale, but a former mid-level employee of Jiyue estimates that Geely and Baidu's debt repayments for Jiyue are also limited. The two are also Jiyue's largest creditors - Geely once provided OEM services to Jiyue, and Baidu provided intelligence-related services. The scale of their claims accounts for about 72% of Jiyue's total debt size.
Therefore, the attitude of the two major shareholders is crucial to the success of Jiyue's bankruptcy and reorganization. Another person familiar with Jiyue's bankruptcy and reorganization process revealed that Baidu seeks to completely withdraw from this round of bankruptcy and reorganization. The person could not confirm Geely's attitude.
Prior to this, Baidu had invested about 8 billion in Jiyue (including Jidu), but in the end it only received about 14,000 total sales, with an average monthly average of about 1,200. Geely holds a 45% stake in Jidu. Jiyue is a new brand jointly established by Geely, Baidu and Jidu.
At present, Jiyue's bankruptcy and reorganization process is relatively smooth. On December 3, Wuhan Jidu Automobile Service Co., Ltd., one of the entities of Jiyue Auto, has asked creditors to declare their claims before December 26. Jiyue has taken a critical step towards bankruptcy and reorganization. After the creditor's claims are registered, the administrator will confirm the claims. The confirmed claims will be registered according to priority and protected by law. However, the claims declared by creditors may not necessarily match the amount of debt repaid.
Registering and confirming claims and voting by creditors to bring in new investors can become a lengthy tug-of-war. Referring to the initial successful reorganization of WM Motor, the entire bankruptcy and reorganization process lasted nearly three years. However, compared with WM Motor's debt scale of more than 10 billion and third-tier claims, Jiyue's debt scale is smaller and its claims are relatively single, which may help speed up the bankruptcy and reorganization process.