Electric car manufacturer Nevs’ Chinese owner, the real estate group Evergrande Group, crashes on the Hong Kong stock exchange. A warning for canceled payments from Group management shakes the market.
The share has lost 22 percent in the closing Tuesday trading at the same time as the Shanghai Stock Exchange stopped trading in Evergrande’s bonds.
According to Evergrande – which states that two subsidiaries have been forced to break bond agreements for 934 million yuan (equivalent to 1.2 billion kronor) as a result of the problems – advisers have been hired to evaluate financial strategies to deal with the situation.
“No risk of bankruptcy”
Group management confirmed early this summer that they had liquidity problems and now say that they are facing major challenges. But they firmly deny that there is any risk of bankruptcy and blame the deteriorating situation on unfavorable media reporting.
Earlier in September, management confirmed that talks were underway to sell assets, including its Hong Kong-listed Evergrande New Energy Vehicle business and real estate consultant Evergrande Property Services.
A financial collapse for Evergrande – whose total debt mountain amounts to 1,970 billion yuan (approximately 2,600 billion kronor) could have major repercussions in the Chinese financial system.
Investors are protesting
Outraged investors protested outside Evergrande’s headquarters in Shenzhen on Monday, demanding repayment of loans and financial contracts with the group.
Nevs bought the bankruptcy estate after Saab Automobile in 2012, and has since been based in Trollhättan. The company currently has around 700 employees. But recently came the news of the dismissal of almost half of the staff – 300 people – in what the company calls a “technical change”.