There may be a glimmer of hope for Evergrande New Energy Vehicle (NEV), the electric vehicle division of Chinese property group Evergrande, as the company’s insolvency administrators have reportedly reached a provisional agreement with an undisclosed buyer for a potential takeover.
According to a report by Bloomberg, the investor is considering acquiring an initial 29 per cent stake in Evergrande NEV, with an option to purchase an additional 29.5 per cent of the shares at a later date. If the deal goes through, the investor would hold a majority stake of 58.5 per cent in the electric car manufacturer.
The agreement is also said to include a potential credit line to support the restart of production, although the details of this arrangement would need to be finalized with the banks.
Evergrande NEV has faced financial difficulties amid the broader challenges faced by its parent company, Evergrande, in the Chinese property sector. Additionally, the president of Evergrande NEV has been under investigation since January, adding to the company’s troubles.
Initially launched with ambitious plans, Evergrande NEV’s production of the Hengchi electric cars faced setbacks, with series production being suspended at the end of 2022 due to a lack of new orders. By the end of 2023, only 1,700 Hengchi electric cars had been built, falling significantly short of the initial target of 10,000 vehicles by the first quarter of 2023.
In a separate development, HiPhi, the electric car subsidiary of Human Horizon, another Chinese electric car manufacturer facing financial challenges, received a promise of up to one billion dollars from an investor in Hong Kong to finance restructuring and restart production.
