China Evergrande’s EV arm, short on cash, may shutter

Having touted the car as early as 2019 and pledging to rival Tesla within three to five years, the Evergrande NEV has been plagued by production delays and setbacks. At its peak, the fledgling automaker was valued at more than Ford Motor Co., before being caught up in the crisis engulfing its parent company China Evergrande Group. Evergrande NEV shares have been suspended since April last year, and will remain suspended until further notice.

The warning of the automaker’s shaky future came as China Evergrande laid out details of a multi-billion dollar restructuring plan that calls for its offshore creditors to swap their debt for new securities, 15 months after the developer first defaulted on its public dollar bonds. The restructuring would allow it to focus on returning to normal operations, the firm said.

Evergrande NEV said in the statement that if it can obtain financing of more than 29 billion yuan ($4.2 billion) it plans to launch a number of flagship models and hopes to achieve mass production. However, it gave no details on when or where it could raise those funds, and said under this plan it would still have a cumulative negative cash flow of 5 billion yuan to 7 billion yuan from 2023 to 2026.

Meanwhile, it is considering the sale of residential and property development projects.

A balance sheet attached to the statement showed Evergrande NEV has almost 59 billion yuan of liabilities, and total equity of just 691 million yuan as of Dec. 31, 2021.

Similar Posts