iceboxarcade| "Mysterious buyer" plans to transfer equity in Evergrande Motors. Can Evergrande's car-building business usher in changes?

editor2024-05-27 07:45:454Academia

◎ reporter Yu Liyan

Evergrande Motor, which has a bumpy way, ushered in the news of equity acquisition. The evening of May 26thIceboxarcadeEvergrande announced on the Hong Kong stock exchange, company 31Iceboxarcade.4.5 billion potential shares for sale (about 29% of all issued shares)Iceboxarcade.0%) will be acquired immediately, and 3.203 billion potential shares for sale (accounting for approximately 29.5% of all issued shares) will be the subject of an option for potential buyers for a certain period of time after the date of the Sale and purchase Agreement. The company applied to the Hong Kong Stock Exchange to resume trading in its shares at 9: 00 a.m. on May 27.

Potential buyer intends to transfer shares of Evergrande Motor

Evergrande Automobile announcement, the company has been aware that a potential buyer and the company's shareholders China Evergrande Group (winding up), Evergrande Health Industry Group Co., Ltd., Acelin Global Limited (collectively referred to as the "potential seller") entered into terms and conditions, will be transferred to the shares held by the above shareholders of Evergrande Automobile.

iceboxarcade| "Mysterious buyer" plans to transfer equity in Evergrande Motors. Can Evergrande's car-building business usher in changes?

Evergrande said it was aware of a credit agreement mentioned in the terms and conditions under which a potential buyer (or another party designated by him with the company's consent) would provide credit to the company to finance the company's continued operation and development of its electric vehicle business. At present, Evergrande is seriously short of funds, and the Tianjin plant has stopped production since the beginning of this year. At present, the company's Tianjin factory has not yet resumed production.

A reporter from the Shanghai Securities News noted that since the suspension of trading was announced on May 17, there have been numerous negative rumors and news related to Evergrande. On the evening of May 22nd, Evergrande announced that its subsidiary Evergrande New Energy Automobile Investment holding Group Co., Ltd. recently received a letter from the relevant local administration requesting the termination of a series of previously signed investment cooperation agreements. And return a total of about 1.9 billion yuan in awards and subsidies.

According to the announcement, starting from April 29, 2019, Evergrande New Energy Automobile Investment holding Group Co., Ltd. and its related subsidiaries signed with the relevant local administrative departments.IceboxarcadeThere have been a number of investment cooperation agreements. However, due to the company's failure to fulfill its contractual obligations as agreed in the agreement, the relevant local administrative departments propose to rescind the agreement and request the return of the rewards and subsidies issued in accordance with the provisions of relevant laws and regulations.

In the face of this emergency, Evergrande said that the relevant subsidiaries plan to write to the relevant local administrative departments for coordination. However, the company also acknowledges that if the above letter is finally implemented, it will have a significant adverse impact on the financial position and operation of the company or the relevant subsidiaries.

Evergrande has disclosed that it has built production bases mainly in Tianjin, Shanghai and Guangzhou, according to Evergrande's financial results. Evergrande's government subsidy data rose sharply after signing a cooperation agreement with local governments in 2019, and then returned to zero after a subsequent outbreak of debt risk. According to the data, in the "deferred income" government subsidy part of the annual report, the government subsidy funds in 2018, 2019, 2020, 2021 and 2022 are 0 yuan, 1.363 billion yuan, 1.194 billion yuan, 409 million yuan and 0 yuan respectively.

According to the latest financial report, Evergrande's annual income in 2023 was 1.34 billion yuan, and its net loss totaled 11.995 billion yuan, a year-on-year loss reduction of 56.64 percent. As of December 31, 2023, Evergrande has delivered more than 1389 vehicles.

Evergrande's car-building business is in crisis.

Hengda's Hengchi car brand was born in 2019, and participated in the 2021 Shanghai Auto Show in high profile, launching nine pure electric models in one breath, with a booth area larger than that of world-class first-tier car companies in the same field. At that time, Liu Yongzhao, president of Hengchi, said that Hengchi would start trial production in the fourth quarter of 2021 and deliver it on a large scale in 2022. However, it was not until April 2022 that three Hengchi 5 real cars were unveiled. Six months later, Hengchi 5 was finally delivered. However, Hengchi soon ran into quality questions. Since then, due to lack of funds, Hengchi's Tianjin factory suspended the production of Hengchi 5.

However, China Evergrande, which is betting on the new energy car track, is still trying to help Evergrande, which is also listed on the Hong Kong stock exchange, out of trouble after being caught in a liquidity crisis. At the end of May 2023, leaders of Tianjin Binhai New area led a team to investigate Hengchi Automobile Factory in Tianjin. At that time, Hengchi introduced that the Hengchi Tianjin factory has now resumed production in full. Liu Yongzhao said that the company will make every effort to speed up the production and delivery of Hengchi 5, and continue to promote the R & D and production of follow-up models to make the enterprise bigger and stronger.

But the good times didn't last long. Evergrande Motor announced on January 8, 2024 that Liu Yongzhao, the company's executive director, has been criminally detained in accordance with the law on suspicion of breaking the law and committing a crime. In addition, Evergrande Hengchi New Energy vehicle (Shanghai) Co., Ltd. added three pieces of information about the person subject to execution, totaling 98 million yuan.

On August 14, 2023, Evergrande announced that it had received the first strategic investment of US $500m from NWTN.US, a listed company owned by the UAE national sovereign fund, and that another Rmb600m of transitional funds would be received from five working days after the announcement. The proposed deal is expected to be completed in the fourth quarter of 2023. After the completion of the deal, Newton's stake in Evergrande accounts for 27.5% of the total number of common shares issued after the expansion.

At that time, the market thought that Newton Investment would be Evergrande's "life-saving money". However, Evergrande announced on the Hong Kong Stock Exchange on the evening of April 5, 2024 that the strategic investment agreement with Newton Group was terminated. The original transaction and the revised terms of the related debt-for-equity swap failed to achieve further development. Some auto industry analysts say Evergrande's car-making business is already in crisis.

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