Evergrande Auto Announcement: Buyer for restructuring not yet found

Recently, there is breaking news regarding Evergrande Auto. On the evening of February 3, Evergrande Auto issued an announcement regarding its business operations and updates. The announcement revealed that so far, they have not been successful in finding strategic investors or buyers who could help alleviate the liquidity problem and advance a proper restructuring.

In the announcement, China Evergrande New Energy Vehicle Group Limited (referred to as “Evergrande Auto”) stated that despite efforts to cut costs through various means over the past 6 months, they can only sustain basic operational activities. Due to low and insufficient fund levels, Evergrande Auto cannot guarantee the continuity of several services, including but not limited to auditors and related professional consultants conducting on-site audit work up to the end of 2024.

Moreover, Evergrande Auto also mentioned that they have yet to successfully find strategic investors or buyers who can help alleviate the liquidity problem and promote the appropriate restructuring. They will continue their efforts in seeking potential buyers.

According to a report by Securities Times, Evergrande Auto’s mid-year report for 2024 revealed a revenue of 38.38 million yuan in the first half of 2024, a decrease of 75.17% compared to the same period last year of 154 million yuan. The decrease in revenue was mainly attributed to the decline in sales of Evergrande Hengchi 5. Data shows that by June 30, 2024, Evergrande Auto had delivered over 1429 new energy vehicles.

In the first half of 2024, Evergrande Auto incurred a net loss of 20.256 billion yuan, which expanded by 13.38 billion yuan compared to the same period last year, reaching a notable point that the losses in the first half of 2024 had surpassed the full-year losses of 119.95 billion yuan in 2023.

Regarding the expanded losses, Evergrande Auto had previously warned in its performance announcement: “Given that Evergrande Group in China was ordered to be wound up by the High Court of Hong Kong on January 29 this year, out of prudence, the company increased provisions for impairment of receivables from subsidiaries and joint operating companies of Evergrande Group in China. A full provision of approximately 16.737 billion yuan was made in the first half of 2024.”

A few days ago, further information was released by China Evergrande on the Hong Kong Stock Exchange regarding the liquidation petition filed against Faraday Holding.

On January 23, 2025, during the hearing related to the liquidation petition at the High Court of Hong Kong, the judge instructed to cancel the scheduled liquidation petition hearing on March 12, 2025, and rescheduled it to February 17, 2025. The company will issue announcements regarding the liquidation petition and hearing in accordance with listing rules and applicable laws at the appropriate time.

Furthermore, China Evergrande stated in the announcement that trading of the company’s shares has been suspended since 10:18 am on January 29, 2024 and will continue to be suspended until further notice.

Based on past announcements by Evergrande, Faraday Holding Limited is a wholly-owned subsidiary of Evergrande Real Estate, acting as the main investment and only overseas financing platform for Evergrande Real Estate to support domestic and overseas development projects.