According to a report by FT on Monday, shares of Evergrande’s electric vehicle (EV) division plunged in Hong Kong after it dropped plans for a secondary listing in Shanghai.
- The scrapped listing is the latest hit to a division that had a higher stock market valuation than Ford and occurred as a liquidity crisis at Evergrande had hampered global markets and increased fears among international investors.
- The real estate developer failed to make an $83.5 million coupon payment due on Friday for one of its dollar bonds and has a 30-day grace period before officially falling into default.
- Local governments in China have also taken control of sales revenue from Evergrande properties to prevent the potential misuse of funds amid expectations of the largest debt restructuring in China.
- Evergrande New Energy Vehicle’s shares dropped almost 25% before the losses softening to be down nearly 10% after the company stated that its ‘proposed issue of renminbi shares will not proceed further’ following an agreement with Brokerage Haitong Securities.
Evergrande’s NEV unit had raised concerns of a ‘serious shortage of funds’ and acknowledged missing employee salary payments and inability to pay factory suppliers, indicating a worsening liquidity crisis. EGRNF down -10.42%