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Evergrande China New Energy Vehicle Group (0708.HK) resumed trading on Monday after the company announced that liquidators had agreed on behalf of major shareholders to sell their shares in the electric vehicle (EV) maker.
Shares of the electric vehicle unit of troubled developer China Evergrande (3333.HK) surged 113% to HK$0.81, the highest level since Sept. 22, making it the biggest gainer on the Hong Kong stock market, eventually closing at 79%, after being suspended on May 17.
The non-binding agreement signed by liquidators on behalf of China Evergrande Group, Evergrande Health Industry and Acelin Global provides for an outside buyer to acquire 29% of the company, with an option to buy an additional 29.5%. The three together own 58.5% of the cash-strapped electric car company, which halted production at its plant in the northern city of Tianjin in early 2024.
The EV unit also mentioned that preliminary documents indicate the potential buyer will provide a line of credit to finance its operations and business development.
Last week, China Evergrande New Energy Vehicle reported that it had received a letter from the local administration demanding the repayment of 1.9 billion yuan ($262 million) in subsidies and incentives.
Earlier this year, China Evergrande, the world’s most indebted property developer, was ordered into bankruptcy after failing to provide a concrete restructuring plan, more than two years after it defaulted on its overseas debt.
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Reporting by Hong Kong newsroom; Editing by Clarence Fernandez.
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