Evergrande Group. Photo: VCG

 
Chinese indebted property developer Evergrande Group's new energy unit has scrapped listing on the Shanghai Stock Exchange, which may add pressure to the group's liquidity-easing plan by selling the business. 

China Evergrande New Energy Vehicle (NEV) Group Ltd announced on Sunday night that the company and Haitong Securities Co have mutually agreed to terminate the listing agreement following "due and careful consideration."

The company's proposed issuance of shares on the Science and Technology Innovation Board of the Shanghai Stock Exchange will not proceed further, according to a filing to the Hong Kong stock exchange.

In a recent statement, Evergrande Group said that it has been actively exploring options with potential investors on the sales of part of its stake in China Evergrande New Energy Vehicle Group Ltd, as the developer faces "tremendous pressure" in regard to its cash flow and liquidity.

Reuters reported in August that Evergrande Group was in talks with smartphone market Xiaomi and Shenzhen investment firms for selling part of a 65 percent stake in the NEV unit.

Evergrande NEV was created when Evergrande Health changed its name in July 2020. Through a series of mergers and acquisitions, the company expanded into businesses including assembled vehicles, power battery and electric machinery.

The company laid bare its ambition in the NEV sector by announcing in September last year to issue no more than 1.6 billion A-shares in Shanghai.

The company posted revenue of around 6.9 billion yuan ($1.07 billion) for the first half of 2021, up 53.5 percent year-on-year. However, its new energy vehicle business contributed only 37 million yuan, while most revenue came from its health management business, according to interim financial results.

Due to continuous investment in the NEV sector, Evergrande NEV reported loss of 4.82 billion yuan in the first half of the year, compared with loss of 2.46 billion yuan last year.

Evergrande NEV shares in Hong Kong plunged 10.31 percent to HK$1.95 ($0.25) as of 10 am on Monday.

Global Times