Evergrande NEV shares more than double

Evergrande NEV shares more than double on potential sale

/ 01:36 PM May 27, 2024

HONG KONG, China — Shares in the electric vehicle arm of embattled Chinese property giant Evergrande doubled in Hong Kong on Monday after news of a possible buyer of the firm emerged.

Heavily indebted Evergrande has become the poster child of the years-long crisis in China’s real estate market, a crucial pillar of growth in the world’s second-largest economy.

The firm was earlier this year handed a winding-up order by a Hong Kong court after struggling for years to repay creditors after its 2021 default.

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The crisis has impacted the company’s subsidiaries, hammering their share prices.

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But Evergrande NEV briefly soared as much as 113 percent Monday as trading resumed after being suspended on May 17. That represented the biggest intra-day jump in nearly 10 years, according to Bloomberg News.

However, the firm’s shares are still worth just a fraction of what they were at their peak in 2021 before the crisis struck Evergrande.

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Potential buyers of EV arm

The surge followed its announcement on Sunday that liquidators were in talks with potential buyers of almost 60 percent of the company’s shares.

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READ: Embattled China Evergrande ordered to liquidate by Hong Kong court

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The deal would see the buyer take an initial 29 percent stake and include an option to purchase another 29.5 percent later.

It also mentioned the possibility of providing a line of credit “for the purpose of financing the group’s continuing operation”, the statement added.

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Evergrande NEV was last week ordered by Chinese authorities to repay 1.9 billion yuan ($262 million) of subsidies and incentives, which the company said “could have a material adverse impact on the financial position”.

In January, the company said its executive director Liu Yongzhuo had been detained “on suspicion of illegal crimes”.

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TAGS: electric vehicle, Evergrande

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