Evergrande’s Electric Vehicle Unit Shareholders Approve Restructuring Agreement
China Evergrande New Energy Vehicle Group’s shareholders have approved a proposal to dispose of two subsidiaries in a restructuring deal, according to a filing with the Hong Kong stock exchange on Friday. The EV company, a subsidiary of troubled property developer China Evergrande, garnered over 50% of the votes during a general meeting held on Friday.
The restructuring involves the sale of two debt-ridden firms to another China Evergrande unit as part of the auto company’s restructuring plan. The sale is expected to generate a $3.6 billion gain for the EV unit. The restructuring is aimed at helping the EV unit focus on new energy vehicles and improving its valuation.
The move is also expected to attract investors to Evergrande Auto and raise funds. Meanwhile, China Evergrande has received an enforcement notice issued by a Guangzhou court to fulfil its repurchase obligation worth around CNY 5 billion ($700 million) after a deal dispute, in addition to outstanding dividends, liquidated damages and legal fees.