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Evergrande EV unit liquidators enter preliminary talks with possible buyer

The possible sale involves 58.5% of all issued shares.

China Evergrande New Energy Vehicle Group Limited has announced that liquidators representing its owners have found a potential buyer that may also provide a line of credit to continue its operations. 

In a regulatory filing, the company said the representatives and an unnamed third party purchaser have entered into a term sheet, pursuant to which the parties may enter into a definitive sale and purchase agreement (SPA).

Currently, the owners hold 6,347,948,000 shares, representing approximately 58.5% of all the issued shares.

The company said 29% of the shares will be acquired by the buyer immediately. Meanwhile, the other 29.5% would be subject to an option exercisable by the potential purchaser during a certain period after the date of the SPA.

The agreement also includes the possible buyer providing a line of credit for the purpose of financing the group’s continuing operation and the development of the electric vehicle business. 

“Currently, the group is in severe shortage of funds. The Tianjin factory of the Group has ceased production since the beginning of this year. As at the date of this announcement, the Tianjin factory of the Group has not resumed production,” the company said. 

ALSO READ: Evergrande stalls 2023 annual results release

China Evergrande New Energy Vehicle noted the term sheet is not legally binding, and that the SPA and facility agreement are subject to further negotiation.

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