Huachen Automotive Group Holdings has entered bankruptcy restructuring.
The Shenyang Municipal Intermediate People's Court in northeast China's Liaoning Province, where the company is based, on Friday accepted the restructuring application filed by a creditor.
The court said the auto firm had insufficient assets to pay off its debts but it was worthwhile and possible to rescue the company through restructuring.
The state-owned conglomerate is the parent of Brilliance China Automotive Holdings, which teamed up with German carmaker BMW to form a joint venture BMW Brilliance Automotive in 2003.
Sources with Huachen said the restructuring only involves its own brands, but its joint ventures with BMW and Renault will not be affected.
The company has been struggling with debts and loss making of its self-owned brands, a situation exacerbated by the COVID-19 outbreak. Last month, it triggered concern after defaulting on a 1-billion-yuan (about 152 million U.S. dollars) bond. Enditem