Although Evergrande Auto said negotiatings are still ongoing which hint at the possibility of a revised deal, its stock plummeted 17 percent on January 2.
Photo from CFP
By LIU Zeran
The deadline to complete a share deal between China Evergrande New Energy Vehicle (Evergrande Auto) and a Dubai-based automaker NWTN passed at the end of the year. Evergrande Auto stock fell 17 percent when markets reopened on January 2.
The completion of Evergrande Group's debt restructuring was crucial to the US$500-million transaction. In August 2023, Evergrande Auto said NWTN would become its largest shareholder, but the arrangement was already in jeopardy by the end of September, due to uncertainties of Evergrande’s restructuring.
The market was, briefly optimistic - starry-eyed even - about the negotiations. The company opened showrooms for its Hengchi in December and in three days Evergrande Auto stock rose 77 percent.
But many are unsure whether NWTN truly had the capability or intention to inject funds into Evergrande Auto. Hui Ka Yan, founder of Evergrande Group, detained by the authorities in September, is a close acquaintance of NWTN founder WU Nan.
Evergrande Auto still possesses technology and patents, along with factories in Tianjin, Shanghai and Guangzhou, which remain attractive to new entrants in the industry lacking qualifications for car manufacturing.