Evergrande Group, China's largest real estate company with a heavy debt load, has chosen to save itself with the sale of assets, and its car-making business is one of them.
Evergrande Auto said in an announcement Tuesday that its parent company and controlling shareholder Evergrande Group is approaching several potential independent third-party investors to explore selling some of its assets, including but not limited to part of its interest in Evergrande Auto and Evergrande Property Services.
Evergrande Auto has indicated that as of the date of the announcement, it has not finalized or entered into any specific plans or formal agreements.
This is not the first time Evergrande Group has sold its stake.
In mid-May this year, Evergrande Group sold 2.66 percent of Evergrande Auto, selling 260 million Evergrande Auto shares at HK$ 40.92 ($5.26) per share, in order to cash out approximately HK$ 10.6 billion.
As of June 30, Evergrande Auto had a net loss of about RMB 4.8 billion ($740 million), compared with a net loss of about RMB 2.45 billion for the same period in 2020, according to an announcement made by the company on Wednesday.
For Evergrande Group, the ability to successfully sell assets to return cash in the future is crucial to resolve its debt problems.
The state-owned company may take over some of Evergrande Group’s assets in the future through a portfolio acquisition, cls.cn quoted an industry source as saying on Tuesday.
In July, Evergrande Group achieved contracted sales of RMB 43.78 billion, down 38.89 percent from June.
From January to July, Evergrande Group achieved contracted sales of RMB 400.56 billion, an increase of 0.36 percent year-over-year.
Evergrande Auto rose 5.61 percent to HK$13.94 in Hong Kong as of press time. The stock is down about 80 percent since April 19.
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