Wolong provides $14M guarantee for its 74%-owned EV motor unit
What's the deal? Wolong Electric Drive GroupDealroom has a profile for this one. Try Dealroom → signed a maximum-guarantee contract with Bank of ChinaDealroom has a profile for this one. Try Dealroom →'s Shangyu branch on October 9, 2026, backing up to ¥100 million ($14 million) in financing for its subsidiary Wolong ZF Automotive MotorDealroom has a profile for this one. Try Dealroom →. The guarantee is a joint-liability pledge with no counter-guarantee, running through October 9, 2028.
What does the company do? Wolong ZF develops and makes electric motors and control systems. Wolong Electric Drive owns 74% of it, making it a controlling subsidiary.
Why now? Wolong's board approved the 2026 subsidiary guarantee plan in March, and shareholders signed off in April. The guarantee supports Wolong ZF's working-capital loans, guarantees, and bank acceptance bills — financing its day-to-day operations.
The numbers: Wolong ZF swung to a ¥5.3 million profit in the first half of 2026, reversing a ¥19.1 million loss for full-year 2025. Its debt-to-asset ratio eased to 60.72% from 63.53%, and it carried no bank loans as of June 30, 2026.
What could go wrong? The company says the risk is controllable, citing the subsidiary's ability to repay. Total outstanding external guarantees from Wolong and its units stand at ¥465.97 million ($65 million), or 4.25% of audited net assets attributable to the parent, with no overdue or irregular guarantees.
The signal: Parent-backed bank credit remains a common lever for Chinese listed firms to fund subsidiaries scaling in the EV supply chain, especially units returning to profit after a lossmaking year.
Read more: sohu.com
Image credit: jurvetson
