Evergrande Group Photo: CFP

 
The EV vehicle unit of China's cash-stripped property giant Evergrande Group will sell a total of HK$500 million ($64.18 million) worth of shares in order to pave the groundwork for production of its Hengchi new energy-vehicle (NEVs), according to a file the company sent to the Hong Kong stock exchange on Tuesday. 

Evergrande New Energy Vehicle Group said in the filing that it has entered into a placing and subscription agreement with the placing agent to place 175 million placing shares at HK$ 2.86 ($0.37) per share through top-up placing, proceeds arising from the placing will be diverted to research and development and production.

The placing shares accounted for approximately 1.79 percent of the issued shares as of Tuesday and approximately 1.76 percent of the enlarged total issued shares following completion of the subscription, per the statement. 

The company declared the Hengchi 5 LX model to the Ministry of Industry and Information Technology (MIIT) recently according to a MIIT's announcement on Tuesday, while media reports claiming it as the first Evergrande model has declared which will be the most affordable model under the Hengchi brand with a retail price lower than 200,000 yuan. 

Evergrande said earlier that company is seeking a transition from property toward NEVs within 10 years as part of the indebted developer's business transformation plan.

Liu Yongzhuo, the president of Evergrande New Energy Vehicle, said in October that the group would achieve its goal of delivering the first Hengchi-branded car earlier in 2022, as the company has commenced a three-month campaign to ensure that its first car rolls off the production line at its Tianjin plant.

The stock price of Evergrande New Energy Vehicle Group stood at HK$3.71 per share as of press time, up 3.36 percent.

Global Times