Chinese electric vehicle (EV) maker Chehejia (CHJ) is planning to restructure into a variable interest entity (VIE) and register an offshore holding company for a possible listing overseas.

According to an announcement released Tuesday by major shareholder Zhejiang Leo Company Ltd, one of its Hong Kong subsidiaries will subscribe approximately 68.6 million shares of Leading Ideal Inc, a Cayman Islands corporation which will be jointly owned by CHJ shareholders.

CHJ will be indirectly controlled by Leading Ideal Inc, after it completes the restructuring using the VIE structure, said Zhejiang Leo. The Shenzhen-listed company, which owns about 7.5% shares of CHJ, said the deal was “in line with CHJ’s reorganizing” and that its ownership stake will be the same under the new structure.

“Public listing is an inevitable choice [for CHJ], as it has been hard for the company to raise funds in private capital markets,” (our translation) reported China Business Journal citing an industry insider. Chinese companies that list in the US mostly use a foreign incorporated company as the listed company. CHJ declined to comment when contacted by TechNode on Tuesday.

The deal comes at the same time as reports that Chinese billionaire, Meituan CEO Wang Xing will lead a $500 million fundraising round in the EV maker, investing $300 million for 10% share. This round will value the company at $2.9 billion. Chinese media reported that Wang previously expressed his appreciation for CHJ founder Li Xiang, a Chinese auto veteran, and optimism about the Chinese EV market.

Bytedance may also invest $30 million in this round, which was to close by June according to a Reuters report. CHJ has raised around RMB 7 billion (around $1.01 billion) from investors including venture capital firm Matrix China, and government-backed Shougang Fund. The EV maker plans to deliver its first all-electric SUV model Leading Ideal ONE in the fourth quarter of this year, and said it expects production capacity of 50,000 units by the end of the first half of 2020.

Chinese EV makers have been struggling to raise funds and scale their capital-intensive businesses following a reduction in government subsidies. Another EV startup, Xpeng Motors, is about to close a roughly $600 million round of funding this year, according to a CNBC report. The Guangzhou-based company announced Tuesday it had just completed production of 10,000 units of its first commercial model G3 SUV, for which it previously set a goal of delivering 10,0000 units by July.

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Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: or Twitter: @yushan_shen

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