The debt-laden Evergrande Group’s asset sale appears to be widespread, with its ownership of National Electric Vehicle Sweden AB (NEVS) in discussions to sell.
NEVS CEO Stefan Tilk said the company is in talks with US and European venture capital firms and industrial partners to find a new owner, though it still has the money to sustain itself “for a good while,” Reuters reported Saturday.
Tilk said several investors have shown interest in the company, but did not comment on a possible valuation. The report cited a person familiar with the matter as saying the unit could be valued at as much as $1 billion.
NEVS was qualified to produce electric cars in Tianjin, China, in 2017 and was acquired by Evergrande in January 2019.
Earlier this year, Evergrande Auto, a subsidiary of Evergrande, shifted its strategic focus to Tianjin, where it plans to build the Hengchi 5, with some production staff, production equipment and pilot cars from Guangzhou and Shanghai being moved to Tianjin, according to a recent report by local tech outlet LatePost.
However, the plant’s production line was built according to the requirements of the NEVS 93 model, which NEVS had previously declared to the Chinese Ministry of Industry and Information Technology, and could not meet the Hengchi 5’s production requirements. Evergrande began dismantling and renovating the production line late last year, and that renovation work has now stalled, LatePost said.
Evergrande Auto, which launched its new brand Hengchi in August 2019, has announced nine of the 14 vehicles it has designed, but none have yet begun mass production.
The company has car production plants in Guangzhou, Shanghai and Tianjin. But with the outbreak of funding chain problems, only the Hengchi 5 and Hengchi 6 projects are currently being kept, according to LatePost.
The faster-moving Hengchi 5, which is set to launch first, was originally planned to start production at the Nansha plant in Guangzhou, but the plant never got the production status issued by regulators.
LatePost said that Evergrande Auto’s Tianjin plant production line renovation project had been largely stalled not long ago due to outstanding payments to equipment suppliers, and the Hengchi 5, which was scheduled to launch early next year, did not begin production preparations as scheduled.
It is worth noting that after the release of the LatePost report, cls.cn quoted sources close to Evergrande Auto as saying that the Tianjin plant’s production line renovation was fully restarted earlier this month and is now in full swing to ensure that the Hengchi model will roll off the production line early next year as scheduled.
According to an article published on Evergrande Group’s official website on October 11, Evergrande Auto held a partner meeting at its Tianjin production base, attended by Tianjin government officials and executives from 200 strategic partners, including Bosch and Hitachi.
Evergrande Auto President Liu Yongzhuo said the company has launched a three-month campaign to ensure that the first Hengchi model will roll off the line at the Tianjin plant early next year.