Following reports on Thursday that Chinese property developer Evergrande Group was in talks with companies including Xiaomi to sell stakes in its electric vehicle business, both of them clarified.
"The following clarification is provided in response to yesterday evening's inaccurate rumors regarding Xiaomi's car-making efforts," Xiaomi said Friday.
"As of now, Xiaomi Group has indeed approached various car building teams from various parties for communication and discussion, but has not made any resolution on the intention to cooperate. We are not responding to any market rumors, please refer to the official announcement," the company said.
Earlier today, Evergrande Group also said that Evergrande Auto had preliminary exchanges with Xiaomi Group in the process of introducing strategic shareholders, but did not discuss in depth to move forward.
Evergrande was in talks with Xiaomi and a Shenzhen government-backed investment firm seeking to sell a portion of its 65 percent stake in Evergrande Auto, Reuters said on Thursday, citing three sources.
Evergrande Auto had a market value of about $12.5 billion as of Thursday's close, and a source said the consortium was considering buying a significant minority stake, a Reuters report said.
As of now, the results of the talks have not been finalized. However, Xiaomi will still choose to build its own car, and the address will be officially disclosed next week at the earliest, the report said.
NIO and XPeng have not yet responded.
Evergrande Group, which is heavily burdened with debt, has chosen to save itself by selling off its assets, and its car-making business is one of them. This is not the first time Evergrande Group has sought to sell its stake.
In mid-May this year, Evergrande Group sold 2.66 percent of Evergrande Auto, selling 260 million Evergrande Auto shares at HK$ 40.92 ($5.26) per share, in order to cash out about HK$ 10.6 billion.
As of June 30, Evergrande Auto had a net loss of approximately RMB 4.8 billion ($740 million), compared to a net loss of approximately RMB 2.45 billion for the same period in 2020.
For Evergrande Group, whether it can successfully sell its assets to return cash in the future is very critical to resolve its debt problem.
The state-owned company may take over some of the assets in Evergrande Group's hands in the future through a portfolio acquisition, cls.cn previously cited an industry source.
Shares of Evergrande Auto, which is listed in Hong Kong, have continued to down since the Shanghai Auto Show on April 19, falling 85 percent so far. As of press time, Evergrande Auto was up 5.6 percent to HK$10.56 in Hong Kong.