Evergrande EV Unit Says Liquidators in Talks With Potential Buyer

evergrande ev unit says liquidators in talks with potential buyer

Liquidators of the beleaguered China Evergrande Group are in talks with a potential buyer to sell a significant stake in the property giant’s new energy vehicle unit.

The liquidators plan to initially sell a 29% stake in China Evergrande New Energy Vehicle, with the potential buyer having the option to buy an additional 29.5% stake, the EV maker said Sunday.

As per the terms of a nonbinding share transfer agreement, the buyer will provide a line of credit to help develop the electric vehicle business, the EV maker said.

Evergrande Auto didn’t identify the potential buyer.

Earlier this year, a Hong Kong court ordered the embattled property giant’s liquidation after it failed to reach an agreement with its creditors. The court’s ruling gave creditors the power to liquidate China Evergrande Group’s businesses.

The property giant, which has around $300 billion in liabilities, stopped paying its debts over two years ago and has been negotiating a restructuring with its creditors ever since.

“Currently, the group is in severe shortage of funds,” Evergrande Auto said, adding that its factory in Tianjin, which ceased production at the beginning of this year, has yet to resume production.

Evergrande Auto, which once had ambitions of surpassing Tesla and becoming the world’s top EV maker, boasted a market capitalization of more than $80 billion at its peak in April 2021.

Its Hong Kong-listed shares have since plummeted, resulting in a market value of $527 million before the shares were halted on May 17 pending an announcement. Trading of the company’s shares will resume on May 27.

Write to P.R. Venkat at [email protected]

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