A share sale plan between China Evergrande New Energy Vehicle Group, the electric vehicle subsidiary of the troubled property developer China Evergrande, and US-listed green energy firm NTWN has been suspended, as per a Hong Kong stock exchange filing.
The Chinese firm cited “significant uncertainties” associated with the Evergrande group as the primary reason for suspending the share subscription agreement, providing insight into the decision-making process, as per the filing made on Sunday.
Evergrande had earlier announced that they were facing investigations involving their parent company, its founder, and top executives. At the same time, their plan to reorganise their debt had hit a roadblock, as per a report by Reuters.
Back in August, the electric vehicle branch made a statement regarding its strategic move. They had decided to offer 6.18 billion new shares to a Dubai-based mobility company called NWTN. The total value of this deal was HK$3.89 billion (equivalent to $496.72 million), indicating a subscription price of HK$0.6297 per share.
According to the most recent filing, trading in shares of China Evergrande New Energy Vehicle Group, which had been temporarily halted since September 28, is scheduled to resume on Monday, October 9, marking a significant development in the company's efforts to address its ongoing challenges.
The company has been grappling with severe financial challenges for a considerable period of time. If the current crisis persists, especially in conjunction with the fragility of China's housing market, Evergrande may find itself confronted with the imminent threat of closure.