NWTN will get a 27.5 percent stake in Evergrande NEV and the right to nominate a majority of the board of directors, valuing the Chinese carmaker at $1.82 billion.
(Image credit: CnEVPost)
Evergrande New Energy Vehicle Group (Evergrande NEV), the electric vehicle (EV) arm of China Evergrande Group, has received hundreds of millions of dollars from an investor in the Middle East, despite seeing huge losses over the past three years.
Evergrande NEV has received a strategic investment of about $500 million from Dubai, UAE-based NWTN Inc (Nasdaq: NWTN), the company said in a statement today.
NWTN is a green energy company focused on providing high-end EV products and green energy solutions, according to the statement.
NWTN's investment will help address the funding challenges faced by Evergrande NEV, the Chinese EV company said.
On July 26, Evergrande NEV said in a Hong Kong stock exchange announcement that it had a loss of RMB 27.7 billion ($3.8 billion) in 2022, albeit narrowed by 51 percent from RMB 56.3 billion in 2021.
As of December 31, 2022, Evergrande NEV's accumulated losses and shareholders' losses were RMB 98.9 billion and RMB 68.7 billion, respectively.
As of December 31, 2022, Evergrande NEV had cash and cash equivalents of RMB 220 million, according to its announcement last month.
Evergrande NEV's announcement didn't disclose more details of the deal, but according to NWTN's statement, it will receive a 27.5 percent stake in the Chinese EV company and the right to nominate a majority of the board.
That means Evergrande NEV is valued at $1.82 billion in the deal. The deal is expected to close in the fourth quarter.
Evergrande NEV was founded in 2019 and its first production vehicle, the Hengchi 5, was mass-produced in September 2022 at its Tianjin plant, with deliveries starting in October.
The company's new models, Hengchi 6 and Hengchi 7, have completed a design freeze and undergone extensive test validation, including winter calibration and summer calibration, and are pushing ahead with development and mass production, Evergrande NEV said today.
Evergrande NEV has an automotive manufacturing base in Tianjin with an annual planning capacity of 50,000 units, and automotive parts manufacturing bases in Shanghai and Guangzhou with annual planned capacities of 100,000 and 200,000 units respectively, according to the statement.
NWTN, which was listed on Nasdaq in November 2022, is the first new energy company from the UAE to be listed in the US. It has a complete vehicle assembly plant in Abu Dhabi, according to the statement by Evergrande NEV.
Countries in the Middle East are pushing for a green transition, while the UAE has proposed a national strategy to achieve net-zero emissions by 2050, the statement noted.
Evergrande NEV will explore overseas markets with the support of the Middle East investor, leveraging NWTN's coverage in key markets such as the Middle East and North Africa, it said.
($1 = RMB 7.2641)