A Chinese court has accepted an application from a creditor of Huachen seeking the restructuring of the state-owned company, which defaulted on 6.5 billion yuan ($987.48 million) in debt obligations.

Qi Yumin, formerly vice mayor of the port city of Dalian, was Huachen's chairman between 2005 and 2019. Sources told Reuters that Qi made several strategic mis-steps including approving an unsuccessful MPV (multi-purpose vehicle) project even as consultants warned against it.

Huachen did not immediately respond to a request for comment. Its sitting chairman is Yan Bingzhe, a former vice mayor of Shenyang city.

(Reporting by Yilei Sun, Lusha Zhang and Brenda Goh; Editing by Susan Fenton and David Evans)