Wednesday, January 19, 2022
 
Columnist
Martin Hennecke

Evergrande sinks to new low amid EV setback
 
09/12/2021
 
<p>China Evergrande&#39;s (3333) shares hit an all-time low yesterday after a missed debt payment deadline put it at risk of becoming the country&#39;s biggest defaulter as well as news that its electric vehicles have not been given the green light for production.</p><p>Evergrande fell 6 percent in the afternoon at HK$1.72, the lowest since its November 2009 debut before closing at HK$1.73.</p><p>Failure by Evergrande to make US$82.5 million (HK$643.5 million) in interest payments due November 6 on some US dollar bonds would trigger cross-default on its roughly US$19 billion of international bonds.</p><p>While the 30-day grace period is over, Evergrande has not announced if the bonds have formally defaulted.</p><p>This came as Shandong Expressway, a former strategic investor of Evergrande, said it had not yet received part of the payment, which involved 8 billion yuan (HK$9.83 billion) from Shenzhen Talents Housing Group - a Shenzhen-government-owned firm - for transferring shares in Evergrande.</p><p>Meanwhile, two models being developed by Evergrande&#39;s electric-vehicle unit weren&#39;t included on an approval list issued by the Ministry of Industry and Information Technology, putting another question mark over whether the company will be able to mass produce a car and begin deliveries as promised.</p><p>China Evergrande New Energy Vehicle Group (0708), which hasn&#39;t mass produced any cars for sale to consumers despite pledging to take on Elon Musk in early 2019, applied for approval for two models of its Hengchi brand last month. Both models are pure electric SUVs powered by energy-storage units made by Contemporary Amperex Technology. Shares of the EV unit lost 5.81 percent yesterday.</p><p>Separately, Sunac China (1918) said it had sold US$530 million (HK$4.13 billion) worth of American depositary shares of Chinese housing transactions and services platform KE Holdings for raising working capital.</p><p>The Chinese developer had sold 26.71 million ADS of KE Holdings, equivalent to 80.14 million KE Holdings Class A ordinary shares, in the open market between October 29 and December 7, it said.</p><p>Sunac said it expected to record a loss before taxation of 5.63 billion yuan from the latest disposal in 2021.</p><p>In other news, another mainland developer Fantasia (1777) has reportedly been required by creditors to appoint a receiver in mid-October, according to local media.</p><p>The three joint receivers are Cosimo Borrelli, Jocelyn Chi Lai-man and Kent McParland from the risk consulting firm Kroll, the report said.</p>

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