Evergrande’s EV unit scraps Shanghai IPO plan while CNOOC, Dongfeng Motor unveil new domestic stock offerings

China Evergrande Group hit another bump on the road to ease its liquidity crisis after abandoning a plan to float its car-making unit at home. At the same time, oil explorer CNOOC Limited and Dongfeng Motor unveiled their new listing aims.

The proposed listing on Shanghai’s board for technology companies, known as the Star Market, was first mooted a year ago, when it sought no less than US$5 billion to help fund its ambitions: to take on the likes of Tesla and dominate the local and global electric vehicle (EV) market within three to five years.

Since then, the EV firm – and its cash-strapped parent China Evergrande Group – have instead fallen on hard times, running down its cash before selling its first car. It has delayed payments to suppliers and contractors and halted work on certain projects, according to a filing late Friday. Its market value has evaporated by US$84 billion from the peak in mid-April.

That is just one small part of the troubles brewing at its Shenzhen-based parent company. Founder Hui Ka-yan is racing against time to prevent his indebted property empire from sinking under 1.97 trillion yuan (US$305 billion) of liabilities. A September 23 deadline for an interest payment on an offshore bond passed without an update and some money managers expect an eventual default.