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China Evergrande EV unit plans share sale to fund vehicle production

China Evergrande EV unit plans share sale to fund vehicle production
China Evergrande EV unit plans share sale to fund vehicle production   -   Copyright  Thomson Reuters 2021
By Reuters

HONGKONG -China Evergrande’s electric vehicle unit said on Wednesday it plans to sell HK$500 million ($64.2 million) worth of shares to fund production of new-energy cars, including those made by its Hengchi brand.

China Evergrande New Energy Vehicle Group Ltd plans to sell 174.83 million new shares, or 1.76% of the enlarged share capital, in a top-up placement, it said in a filing to the Hong Kong bourse on Wednesday.

The new shares will be sold at HK$2.86 apiece, representing a 19.89% discount to Tuesday’s close of HK$3.57 each, to its controlling shareholder Evergrande Health Industry Holdings Ltd.

The controlling shareholder will buy the new shares on completion of the sale of the same amount of existing shares at the same price to third-party investors.

China Evergrande New Energy Vehicle said the move was aimed at paving the way for Hengchi new-energy vehicles to start production.

The electric-vehicles unit is seeking Chinese regulatory approval to sell its inaugural Hengchi 5 sport-utility vehicles, as the embattled company vows to start making cars early next year.

The directors had considered various options of raising funds, it said.

China Evergrande, the world’s most indebted developer, has been stumbling from debt-repayment deadline to deadline as it grapples with more than $300 billion in liabilities.

($1 = 7.7840 Hong Kong dollars)