"After careful consideration, the company and Haitong Securities [Evergrande's broker] have agreed to terminate the listing [on the SSE], and will report to [the] Shenzhen Regulatory Bureau of China Securities Regulatory Commission. Therefore, this means that the plan to issue renminbi shares will not continue," the firm's EV subsidiary Evergrande Auto said yesterday.
It unveiled a plan last September to list on the Science and Technology Innovation Board of the SSE by issuing 1.56bn shares. It said on 24 September that it was facing a serious shortage of funds and was in contact with potential strategic investors. "If the introduction of strategic investments or the sale of potential assets do not make any progress, the group's day-to-day operations and the development of new energy vehicles will be affected," it said on 24 September.
Evergrande warned in a statement on 31 August that it would default on its debts if it failed to raise enough cash to cover them. It had 2 trillion yuan ($310bn) in liabilities as of 21 September, owing money to thousands of retail investors, as well as banks, suppliers and foreign investors. Its shares have also plunged in value. Evergrande also missed offshore bond payments totalling $83.5mn on 24 September.
Evergrande entered the automotive industry in 2018 when it acquired a 45pc stake in EV company Faraday Future for $2bn. It has since built automotive manufacturing bases in Guangzhou, Shanghai and Tianjin, with a target of producing 1mn EVs by 2025 and 5mn by 2035. It had also set targets to build factories to produce power batteries with a combined capacity of 60 GWh/yr over 10 years, before the default crisis.
It launched the Hengchi EV brand in 2020, and was planning to start pilot production of its first EV Hengchi 1 model in the final quarter of this year, with deliveries to start next year. Evergrande Auto reported a loss of Yn4.8bn in the first half of this year, rising from a 2.46bn loss a year earlier.
Evergrande also signed a strategic co-operation framework agreement with Chinese state-controlled refiner Sinopec in June to develop infrastructure for new energy vehicles (NEVs). Evergrande chairman Xu Jiayin had laid out a plan to overtake US EV maker Tesla and domestic competitors such as NIO to be the world's largest EV maker by 2025.
China's NEV production and sales hit fresh highs again in August amid the country's accelerating transformation into a low-carbon emission society. Total output reached 1.813mn during January-August, up by 192.8pc on the year, with sales moving up by 194pc to 1.799mn units, according to data from the China Automotive Manufacturers Association (CAAM).
