China Evergrande's EV unit raises $500m

NWTN will acquire a 27.5% stake at the price of HKD 0.63 per share, which represents a discount of 63% to the closing price on the date of the subscription agreement, according to a filing.

The deal remains contingent on Evergrande restructuring its debt – its liabilities amount to more than USD 300m – as well as regulatory and shareholder approvals. In the meantime, NWTN will provide interest-free transitional funding of CNY 600m (USD 82m) to support R&D, manufacturing, and sales services. If the deal does not close, NWTN will retrieve the funding.

As part of its debt restructuring, Evergrade NEV has issued 5.44bn new shares to Evergrande chairman Jiayin Xu and his wife at a price of HKD 3.84 per share. This would see some HKD 20bn (USD 2.5bn) in loans converted to shares. That transaction is expected to close within the year.

Evergrande NEV resumed trading last month on the Hong Kong Stock Exchange after a 16-month suspension pending the release of financial results. It recorded revenues of CNY 5.6bn, CNY 15.4bn, CNY 74m and CNY 134m in 2019, 2020, 2021 and 2022, respectively. Annual losses during this period were respectively CNY 4.4bn, CNY 7.4bn, CNY 56.2bn and CNY 27.7bn.

NWTN was founded by a Chinese entrepreneur Alan Nan Wu and listed on NASDAQ last year. The company expects Evergrande NEV to help it meet rising EV demand in the Middle East.

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