China Evergrande New Energy Vehicle announced on Monday that a local court has ruled that two of its subsidiaries should enter bankruptcy and reorganization proceedings. This decision follows a recent request by individual creditors of the units for such proceedings.
Shares of China Evergrande New Energy Vehicle fell by 7% on July 29, a day after the creditors of Evergrande New Energy Vehicle (Guangdong) and Evergrande Smart Automotive (Guangdong) filed for bankruptcy protection and reorganization. The court hearing took place on August 2, leading to the court’s decision to proceed with the bankruptcy and reorganization of the units.
The electric vehicle division of the troubled real estate developer China Evergrande Group had previously disclosed in May that its liquidators were negotiating with a potential buyer for a stake in the company. This move was aimed at increasing the likelihood of securing a new credit line to support production activities.
The recent court ruling adds to the ongoing challenges faced by Evergrande New Energy Vehicle, as the company continues to navigate financial difficulties amid efforts to stabilize its operations and secure future funding.
