National Electric Vehicle Sweden AB (NEVS), owned by the cash-strapped Chinese property developer, has enough capital to endure “for a long time,”
according to its Chief Executive Stefan Tilk, who also stated that numerous investors had expressed interest in the company.
China Evergrande Group’s Swedish electric vehicle unit as its Chinese parent battles default on more than $300 billion in debts,
China Evergrande Group’s Swedish electric vehicle unit is in talks with US and European venture capital companies and industrial partners to find new owners, according to its top executive.
National Electric Vehicle Sweden AB (NEVS), owned by the cash-strapped Chinese property developer,
has enough capital to endure “for a long time,” according to its Chief Executive Stefan Tilk, who also stated that numerous investors had expressed interest in the company.
The Chinese real estate developer has invested billions of dollars in companies that create automotive technologies, including NEVS. It also has joint partnerships with Hofer in Germany and Koenigsegg in Sweden.
NEVS is the Swedish arm of Evergrande’s EV company, Evergrande New Energy Car Group, which got an electric vehicle production license in China four years ago.
Evergrande has already missed three interest payments on its overseas bonds and has been forced to sell some of its assets in order to acquire cash.
He was concerned about not commenting on a hypothetical valuation. According to Reuters, the unit could be for up to $1 billion, according to a source familiar with the situation.
WHAT IS THE Description OF EVERGRANDE?
Hui Ka Yan, the company’s chairman, launched Evergrande in Guangzhou in 1996. With $110 billion in sales last year,
$355 billion in assets, and over 1,300 properties nationwide, it is China’s second-largest property developer. In 2009, it went public in Hong Kong.
Evergrande overgrew due to a loan-backed land acquisition binge and low-margin apartment sales. It employs 200,000 people and hires 3.8 million people each year for development.
WHAT CAUSED THE DEBT CONCERNS?
In September last year, a leaked letter from Evergrande revealed the company appealing to the government to permit a nowcanceled backdoor stock market offering. The letter was legitimate, according to Reuters, but Evergrande declared it a forgery.
Evergrande announced in June that it had failed to pay some commercial paper on time, and in July, a court froze a $20 million bank deposit held by the company at the request of the bank.
Late in August, the company announced that construction on some of its projects had come to a halt due to unpaid contractors and suppliers.
According to Reuters, it has also failed to make payments on bank and trust debts in recent weeks.
It announced on September 14 that asset and equity disposition plans were unable to make significant headway.
WHAT ABOUT OPERATING OUTSIDE OF CHINA’S MAINLAND?
Evergrande has an office tower and a residential building in Hong Kong and two nearly completed residential developments, and a large piece of undeveloped land.
It has invested billions of dollars in-car technology companies such as Sweden’s NEVS, the Netherlands’ e-Traction, and the United Kingdom’s Protean. It also has joint partnerships with Hofer in Germany and Koenigsegg in Sweden.
Statement of CEO:
NEVS is the Swedish arm of Evergrande’s EV company, Evergrande New Energy Car Group, which got an electric vehicle production license in China four years ago.
Tilk said NEVS is in talks with European and American corporations about a possible sale or other finance, but he wouldn’t name them.
“We’re talking to venture capitalists and firms that have the same philosophy and strategy as us and want to go in with both feet,” he told Reuters. “They’re both industrial partners and venture capitalists.”
Evergrande NEV warned in recent stock exchange filings that it was still looking for new investors and asset sales and that if neither were found, it would struggle to pay employee salaries and meet other costs.
If Evergrande survives the crisis, Tilk believes NEVS, which let off nearly half of its 650 employees in August, will be able to rehire staff to get the expertise Evergrande seeks in Europe.
