China Evergrande's $500 million EV share deal suspended amid uncertainties
Evergrande New Energy Vehicle Group, the electric vehicle (EV) arm of the troubled property developer China Evergrande, has put its $500 million share subscription deal with US-listed NWTN on hold. In a Hong Kong stock exchange filing on October 9, the company cited "significant uncertainties" tied to the Evergrande group as the reason for the suspension. The electric vehicle firm had earlier agreed to issue 6.18 billion new shares to NWTN for a total of HK$3.89 billion (Rs. 4,133 crore).
Stock trading resumes amid ongoing investigations
Trading in shares of China Evergrande New Energy Vehicle Group, which had been halted since September 28, is set to resume today. In the meantime, investigations into the parent company, its founder, and top executives are ongoing. The company's debt restructuring plan has also encountered obstacles. Chinese authorities are reportedly looking into whether Evergrande founder Hui Ka Yan tried to move assets offshore while the company grappled with unfinished projects.
Impact on Chinese economy and housing market
Evergrande's financial woes have put it at the heart of an ongoing property crisis in China, negatively impacting the nation's economy and shaking confidence in the housing market. The company is due for a hearing on October 30 in a Hong Kong court concerning a winding-up petition, which could potentially force it into liquidation. This situation has sparked worries about the stability of China's property sector and its possible effects on global financial markets.
