Shares of New Energy Vehicle Group, the electric vehicle unit of the Chinese group Evergrande, fell by about 26% in the prime trading in Hong Kong, after warning of a severe liquidity shortage and canceling plans for listing in Shanghai.
The company has suspended payment of some of its operating expenses, including some workers’ wages and supplier invoices for equipment, raising fears that it cannot produce more. auto.
In an effort to reduce the impact of the parent company’s debt crisis on the markets, two local governments in China have requested Evergrande to transfer sales proceeds from real estate and residential projects to its government account to protect the interests of investors.
Moody’s said China would avoid the financial and social impacts of Evergrande’s woes, but the economic effects would be felt. in a number of sectors.
Evergrande is burdened by over $ 300 billion in debt resulting from a one-year acquisition, including in the auto electric, where its subsidiary was previously described as a competitor to Tesla.
And it is feared that any default of tens of millions of dollars in interest payments could lead to a chaotic collapse of the company, China’s second largest real estate developer, with major repercussions for the local economy and the rest of the world.
The group – which claims to employ 200,000 people and indirectly create 3.8 million jobs in China – said it was trying to avoid a failure that could have repercussions in Worldwide.
While the government has yet to decide to save the company in difficulties, analysts say Evergrande may have to undergo a state-led restructuring similar to previous moves to save giants in difficulties such as Anbang and HNA Group.
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