The Chinese real estate group Evergrande looks like it is on the verge of withdrawing from the automobile business. According to a media report, the indebted group is looking into selling the division to other Chinese carmakers. This could also have an impact on the production of the Sion by Sono Motors.
Evergrande owns or has stakes in numerous EV companies. With numerous acquisitions, the Hong-Kong based Evergrande Group recently built up its own car business at break-neck speed. Now Evergrande is struggling to pay its debts after Beijing stepped up curbs on the real estate sector to contain the risks of a bubble.
With its first foray into the EV business, Evergrande initially invested in Faraday Future through its health division Evergrande Health. After Faraday Future proved problematic, Evergrande expanded its focus to become one of the largest producers of electric vehicles.
According to Reuters, Evergrande Auto had a market value of $12.5 billion on Thursday just passed. That compares with $87 billion at the end of April when the company’s stock market value was higher than Ford and GM.
As the ChinaStarMarket now reports, Evergrande could sell off its car business in the course of the debt crisis and the group is already in talks with several companies, including Nio, Xpeng and Xaiomi. The outcome of the talks is not yet certain. Neither Nio nor Xpeng and Xiaomi wanted to make a comment on the matter, according to Chinese media.
Reuters also reported that a Shenzhen government-backed investment firm is seeking to sell a portion of its 65 per cent stake in Evergrande Auto. As part of its efforts to reduce its debt, Evergrande is in discussions with what Reuters writes are “several independent third-party investors” interested in the proposed sale of certain assets, including stakes in Evergrande’s electric car businesses.