China’s Didi Global is in talks to own a third of Sinomach Zhijin Automobile, a small maker of electric vehicles, sources revealed on Wednesday.
The news, from two sources who declined to be identified, is seen as a sign that the ride-hailing company, which faced a regulatory blitz after it listed in the United States about a year ago, may have resolved its issues with Chinese authorities.
The talks for a stake in Sinomach Zhijun Automobile are in an advanced stage, the sources said.
One said the two sides have given themselves until the end of June to nail the deal, which would see Didi Global Inc become the second-biggest shareholder of the EV maker after state-backed Sinomach Automobile.
Chinese regulatory scrutiny hammered Didi’s business last year and forced it to pursue a delisting from New York.
News of the talks, which come after a Wall Street Journal report on Monday that regulators are set to conclude their investigations into Didi, could offer more hope to investors about its recovery.
Didi, Sinomach Automobile and Sinomach Zhijun did not respond to requests for comment.
The sources, who have direct knowledge of the deal talks, declined to be identified due to confidentiality constraints.
• Reuters with additional editing by Jim Pollard