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China Evergrande EV unit to raise $347 million from share sale to fund production

China Evergrande EV unit to raise $347 million from share sale to fund production
China Evergrande EV unit to raise $347 million from share sale to fund production   -   Copyright  Thomson Reuters 2021
By Reuters

– China Evergrande’s electric vehicle division is raising about HK$2.7 billion ($347 million) from a share sale to fund production of new-energy cars, it said on Friday.

China Evergrande New Energy Vehicle Group Ltd will issue about 900 million shares at HK$3 apiece through a top-up placement to controlling shareholder Evergrande Health Industry Holdings Ltd, after striking a similar deal with it last week.

The new shares account for about 9% of the company’s total issued stock and are priced at a 15% discount to their Friday’s close of HK$3.53.

The EV 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.

Earlier this month, the EV business announced plans to raise HK$500 million to fund production of cars made by its Hengchi brand.

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.

On Friday, the benchmark provider of Hong Kong’s Hang Seng China Enterprises Index said China Evergrande Group would be removed from its index.

($1 = 7.7925 Hong Kong dollars)