Evergrande Auto to Sell Residential and Property Management Projects to Focus on EV Production
On April 24th, China Evergrande Group announced that its new energy vehicle division will sell two of its businesses to another unit within the group. The move is aimed at enabling Evergrande Auto to focus on automaking.
Specifically, Evergrande Auto will be selling Flaming Ace Ltd and Assemble Guard Ltd, which are primarily involved in residential and property development activities, to Anxin Holding for a nominal amount of 2 yuan ($0.29).
Currently, Evergrande Auto owns Flaming Ace Ltd and Assemble Guard Ltd as its wholly-owned subsidiaries. China Evergrande holds approximately 58.54% equity in Evergrande Auto. Upon completion, Flaming Ace Ltd and Assemble Guard Ltd will become indirect wholly-owned subsidiaries of China Evergrande.
The deal may appear abrupt, but it is actually linked to the historical development of Evergrande Auto. The company’s predecessor was Evergrande Health, which underwent a name change in July 2020. Since then, certain health and residential ventures have remained part of the company’s operations.
Evergrande Auto has announced that it will prioritize the development of new energy vehicles and cannot assure ongoing investment in its health and residential businesses.
SEE ALSO: Evergrande Auto Seeks $4.2B to Avoid Production Halt
Evergrande Auto has revealed that it has delivered over 900 Hengchi 5 vehicles to customers as of April 24th. However, production at the group’s Tianjin factory has been suspended due to insufficient funds and is expected to resume in May. Evergrande Auto is also actively seeking external investors.