WM Motor posted on its official Weibo that after careful consideration, WM Motor has voluntarily terminated the RTO process with Apollo Travel on the Hong Kong Stock Exchange. Currently, WM Motor is still an important shareholder of Apollo Travel and will continue to support the development of Apollo Travel in the future. Previously, on September 8, Apollo Travel (00860.HK) announced on the Hong Kong Stock Exchange that relevant parties had agreed to terminate the agreement to acquire Weimar, so the acquisition and placement will not proceed.

The announcement mentioned that the reasons for terminating the acquisition include turbulent global market conditions, continued uncertainty in the financial market atmosphere and short-term economic recovery.

Apollo Travel’s announcement means that WM Motor, which had been stuck in the quagmire before, lost the opportunity to be listed on the Hong Kong stock market.


"Backdoor" listing failed, Weimar fell into crisis

"Live like an animal," Shen Hui said on his personal Weibo on January 12 this year, the day Weimar announced its listing on the Hong Kong Stock Exchange through a reverse takeover (RTO).

Originally, after the completion of this major acquisition, WM Motor was expected to complete a "backdoor" listing.

On January 11 this year, Apollo Travel, with a market value of only HK$2.3 billion, announced that it would acquire WM Motor's subsidiary from WM Motor for US$2.02 billion (approximately RMB 14.8 billion) and settle the matter by allotting 28.8 billion shares at HK$0.55 per share. After completing this acquisition, WM Motor will hold 31.1 billion Apollo travel shares, with a shareholding ratio of 68.26%. In this regard, this reverse acquisition is also seen as WM Motor clarifying its "backdoor" listing financing path.

At the same time as the acquisition of additional shares, Apollo Travel also disclosed that it will place 7.123 billion shares to no less than six independent placees, with a placement price of no less than HK$0.55 per share. The total proceeds from the placement will be approximately HK$3.918 billion, and the net financing amount is estimated to be approximately HK$3.526 billion.

As one of the earliest new car-making forces in China, WM was once the darling of the capital market. When "Internet car-making" was controversial, WM successfully received investment from star capitals and local governments such as Baidu, Tencent, Sequoia, Chengdu Capital, and SIG.

Public information shows that since its establishment, WM Motor has conducted a total of 12 rounds of financing from A to D. WM Motor has raised a total of approximately 41 billion yuan after 12 rounds of financing in 4 rounds.


However, seven years have passed and tens of billions of funds have been invested. WM Motor, which is still just one step away from being successfully listed, has gradually fallen behind.

The prospectus submitted by WM Motor showed that in the three years from 2019 to 2021, its net profit attributable to the parent company suffered losses of RMB 4.445 billion, RMB 5.084 billion and RMB 8.205 billion respectively, for a total loss of RMB 17.4 billion in the three years. In 2021, WM Motor is actually insolvent, and its net assets are RMB -20.5 billion. This shows how hungry he is for funds. In addition, Apollo Travel mentioned in the announcement of its proposed acquisition of WM Motor that in the first half of 2022, WM Motor sold only 16,500 electric vehicles.

In January this year, Apollo Travel announced that Weimar was seeking three temporary financings within the next two to three months from the date of the announcement to supplement cash flow and working capital for the operations of the acquisition target group (i.e., Apollo Travel). These three financings include: 250 million Hong Kong dollars from a well-known commercial bank in Hong Kong and Macao, 500 million yuan from Zhengwei International, and two loans totaling 1.5 billion Hong Kong dollars from Juguo Investment, a subsidiary of Agile Group.

According to the Financial Associated Press, a person familiar with the matter said at the time, "Weimar does not have a penny left on its books, but it needs to use its limited funds on the 'blade' to ensure the smooth progress of the Hong Kong listing." Weimar's management signed a "bet" agreement with relevant investors, that is, Weimar can finally complete the "backdoor" listing of Apollo Travel in Hong Kong on the premise of completely solving its own problems and resuming work and production to improve its valuation.

Apollo Travel announced the termination of the agreement to acquire Weimar, which may mean that the above-mentioned financing of more than 2 billion yuan has failed.

There are multiple persons subject to execution who are on the verge of bankruptcy

In February this year, Shen Hui posted on Weibo that "Weima has indeed encountered some difficulties due to the objective impact of the epidemic and market environment in the past year. We are making adjustments through a series of measures to reduce costs and increase efficiency, and fully ensure the resumption of work and production, and ensure the experience of end users." In March, WM Motor's official Weibo announced that in the near future, more than 100 dealer stores across the country will resume normal services to solve various car purchase and use problems for users.

However, bad news came one after another from WM Motor. Not only is it facing financial pressure, but it is also plagued by negative news.

On May 15, WM Automotive Technology Group Co., Ltd. and its subsidiary WM Automotive Technology (Sichuan) Co., Ltd. added 3 pieces of information on the persons subject to execution, with a total execution target of 10.84 million yuan. The execution court is the People's Court of Anzhou District, Mianyang City. (See the report for details: WM Motor was forced to pay 10.84 million yuan, and the founder previously said that "everything is improving")

Prior to this, according to Hainan Special Zone News, all WM Motor 4S stores in Haikou City, Hainan Province were closed, leaving more than 2,000 car owners with difficulty in maintenance and repairs. In addition, the "Weima Zhixing" APP and the Weima Auto applet cannot be used normally.

In June, there were reports that Shen Hui was listed as a person subject to execution for breach of trust by the Qingpu District People's Court of Shanghai and was restricted from spending too much. Subsequently, WM Motor’s official Weibo announced that Shen Hui’s height limit order had been revoked. At the same time, it was stated that WM Motor, under the leadership of Shen Hui, is making every effort to provide user services, pay off debts in an orderly manner in accordance with the law, and is actively promoting its plan to go overseas for new energy vehicles. It is expected to resume work and production in the near future and resume normal operations.

According to public information, on August 11, WM Motor added a new piece of information about freezing 6 billion yuan of equity. The equity execution company is Hubei Xinghui New Energy Smart Vehicle Co., Ltd. (the main body of WM Motor's Huanggang factory), and the enforcement court is the Intermediate People's Court of Huanggang City, Hubei Province.

But Weimar's crisis seems to go beyond that. According to the Financial Associated Press, industry insiders close to Weimar said that Shen Hui himself is no longer in the country. This statement was also confirmed by another person familiar with the matter.

Public information shows that WM Motor Technology Group Co., Ltd. has multiple persons subject to execution, and the total amount subject to execution exceeds 590 million yuan. In addition, there are consumption restriction orders and multiple equity freezing information.

Before trying to reversely acquire APOLLO Travel and "backdoor" Hong Kong stock listings, Weimar also tried to land on the Science and Technology Innovation Board. In January 2021, the Shanghai Securities Regulatory Bureau issued an announcement stating that WM Motor has met the conditions for guidance, acceptance and listing on the Science and Technology Innovation Board, and the Shanghai Stock Exchange will soon accept the application materials submitted by it. However, problems continued to emerge during the subsequent review process, and its listing on the Science and Technology Innovation Board ultimately came to nothing.

Editor Xiao Ziqi