NEVS, a Swedish electric vehicle (EV) unit under China Evergrande Group, is negotiating with U.S. and European venture capital companies and industrial partners to find a new owner, Reuters reported on October 15. The firm’s top executive said this is due to the deep debt of more than $300 billion its Chinese parent company is now burdened with.
National Electric Vehicle Sweden AB (NEVS), the Swedish arm of Evergrande’s EV unit Evergrande New Energy Vehicle Group, obtained the license to manufacture EVs in China four years ago.
Stefan Tilk, CEO of NEVS, said its funds could last “for a good while,” adding that several investors were showing interest in the company.
According to Tilk, NEVS issued layoff notices to nearly half of its 650 employees in August, and if Evergrande survives the current crisis, the Swedish unit could recruit staff again to match Evergrande’s expanding plans in Europe.
Scrambling to avoid defaulting on its debts, Evergrande has to sell some of its assets in a hurry to raise cash. At the end of September, the company said it plans sell a 9.99 billion yuan ($1.5 billion) stake in Shengjing Bank to Shenyang Shengjing Finance Investment Group at a price of 5.70 yuan per share.
Evergrande NEV warned in stock exchange filings last month that it was still looking for new investors and to make asset sales, and that without either, it may struggle to pay employee salaries and cover other expenses.