In its latest reconstruction moves, household appliances manufacturer Henan Xinfei Electric Co., Ltd., has auctioned its brand equities and fixed assets worth of millions of RMB to look for new investors.
Xinfei’s brand equities will be auctioned between June 28 to June 29, with price starting at RMB450 million. Its fixed assets including lands and properties, will be auctioned from July 5th, with price starting at RMB115 million, according to information on Alibaba’s online auction platform.
"According to its reconstruction plan, Xinfei is auctioning its equities with the purpose of bringing in new investors, instead of a passive judicial auction," Xinfei wrote in a statement.
Xinfei’s parent company Hong Leong Asia, and its creditors had reached a restructuring plan in a meeting on May 18th. Key terms of the plan includes equity holdings of the existing shareholders of Xinfei shall be transferred to a new investor via a tender process, and new investor is required to be a Chinese corporation with experience in either home appliances manufacturing or home appliances sales and distribution.
Xinfei has a total of 840 creditors with debts of RMB2.3 billion (US$359 million), according to local court. It has negative net assets of RMB1.13 billion (US$176 million).
Founded in 1994, Xinfei was originally a joint venture by Hong Leong Asia Ltd, the trade and industry arm of Singaporean conglomerate Hong Leong Group, Xinfei Group and Singapore Yuxin Electric, which is backed by Henan government. By 2005, Hong Leong Asia’s stakes increased to 90% and became the controller of Xinfei.
Xinfei used to be the top fridge manufacturer in China. In 1996, its market share reached 20% and became the top three fridge brand. However, with increasing market competition and poor localization of its foreign shareholder, the firm lost its competitive edge. In 2017, the firm announced that it had continued loss in the past few years and it decided to stop operation.