Liquidators for the electric vehicle division of China Evergrande Group (3333.HK) are currently in negotiations with a potential buyer to acquire a stake in the company, aiming to secure a new credit line to support production. The firm, known as China Evergrande New Energy Vehicle (0708.HK), initially aimed to rival Tesla but has been significantly impacted by the debt crisis facing its parent company.
On Thursday, China Evergrande New Energy Vehicle announced that its liquidators have not yet finalized any agreements with prospective stake buyers, nor have they secured any deals to extend credit to the EV manufacturer.
In a non-binding agreement disclosed by the liquidators, there is a proposal for a third-party buyer to acquire a 29% stake in the EV unit, with an option to purchase an additional 29.5%. This statement was made in late May, outlining the potential for new investment amid ongoing financial difficulties.
The company has faced mounting pressure from creditors and local authorities, compounded by its lack of funding. In August, China Evergrande New Energy Vehicle confirmed that two of its subsidiaries had initiated bankruptcy proceedings.
As the situation evolves, the focus remains on securing financial backing to resume production and navigate the ongoing challenges stemming from its parent company’s substantial debts.
Source: Reuters
