Evergrande’s EV unit to sell new shares worth US$64 million to drive Hui Ka-yan’s pivot away from property sector

Name: World’s most indebted developer, China Evergrande Group, buys time to repay more creditors
Uploaded: 2021-11-10T08:53:44.000Z
Duration: 1 min 46 s
Description: World’s most indebted developer, China Evergrande Group, buys time to repay more creditors

Hong Kong-listed China Evergrande New Energy Vehicle Group to sell 174.83 million new shares to controlling shareholder Evergrande Health Industry Holdings

The proceeds will be used to put ‘Hengchi new energy vehicles into production’, company says

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A Hengchi 1 EV on display at Auto Shanghai 2021 in April this year. The company said a fleet of 53 cars comprising five of its EV models – the Hengchi 1,3,5,6 and 7 – completed a 70-day road test covering half a million kilometres in September. Photo: Getty Images

Pearl Liu

Published: 4:53pm, 10 Nov 2021Updated: 4:53pm, 10 Nov 2021

China Evergrande New Energy Vehicle Group, the electric vehicle (EV) arm of embattled developer China Evergrande Group, said on Wednesday that it would sell HK$500 million (US$64.2 million) worth of new shares to fund the production of its Hengchi EVs.

In a filing to the stock exchange, the Hong Kong-listed company said it would sell 174.83 million new shares, or 1.76 per cent of its enlarged share capital, in a top-up placement to its controlling shareholder, Evergrande Health Industry Holdings. At HK$2.86 apiece, the new shares will be at a discount of about 20 per cent on its closing price of HK$3.57 a share on Tuesday.

“The proceeds received … will be dedicated to the research and development and production of the company’s new energy vehicles, paving the groundwork for putting Hengchi new energy vehicles into production,” the company said in its filing.

Wednesday’s announcement follows a speech made to staff by Evergrande founder Hui Ka-yan last month, in which he said the company would move away from property development and make its EV venture its primary business within 10 years.

China Evergrande New Energy Vehicle Group has filed for a sales approval for its Hengchi 5 sport-utility vehicle, its first EV, according to data released by China’s Ministry of Industry and Information Technology on Wednesday.

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World’s most indebted developer, China Evergrande Group, buys time to repay more creditors

The carmaker has previously said it planned to start producing EVs in the fourth quarter of this year and delivering them to customers early next year. It has so far unveiled nine models under the Hengchi brand, which means “never stop’, but none are in production yet.

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