WM Motor plans a backdoor listing through a reverse takeover of Apollo Future Mobility Group, which is already listed in Hong Kong, according to local media.

(Image credit: WM Motor Weibo)

Chinese electric vehicle startup WM Motor is considering a backdoor listing in Hong Kong as one of the options to address its current financial woes, the latest report said.

WM Motor is looking at new ways to raise capital, including seeking new investment in the primary market, as well as a backdoor listing, local media outlet Jiemian reported today, adding that at least three insiders at the company confirmed the information.

The company held a board meeting on November 26 and one of the topics discussed was WM Motor's backdoor listing, according to the report.

Although shareholders attending the meeting were not happy with the plan, it has been one of the ways to save WM Motor, mainly because of the current sluggish capital market environment and the limited amount of financing, the report said.

WM Motor plans to achieve a backdoor listing through a reverse takeover of Apollo Future Mobility Group (HKG:0860), which is already listed in Hong Kong, according to the report.

WM Motor has a 28.51 percent stake in Apollo, and its founder, chairman and CEO Shen Hui serves on the latter as co-chairman of the board and a non-executive director.

Apollo, which is currently engaged in the mobility business and outsourcing of engineering services, has a subsidiary that makes electric supercars, and WM Motor aims to go public by integrating with that subsidiary, according to Jiemian.

WM Motor submitted its listing application to the Hong Kong Stock Exchange on June 1, but nothing new has happened since then.

According to the HKEX, the prospectus will lapse if it does not pass the hearing within six months. WM Motor's prospectus is currently in a lapsed status and has not been updated.

With WM Motor's prospectus lapsing, its plans for a backdoor listing are expected to be announced soon, Jiemian said, citing a person familiar with the matter.

In 2019-2021, WM Motor's vehicle sales were 12,799, 21,937 and 44,152 units, respectively, according to its previous prospectus.

From January to October this year, WM Motor sold less than 30,000 units in total, including only 1,117 units in October.

The sharp decline in sales has started to put the company under financial pressure.

On November 21, Shen listed in an internal letter to all employees the initiatives to ease the financial pressure, including a 50 percent pay cut for management at the M4 level and above, and a 30 percent pay cut for general employees.