Evergrande Issues Response After Interview by Chinese Government, In Negotiations with Xiaomi About Auto Business

evergrande
(Source: Evergrande Group)

Departments of the People’s Bank of China and the China Banking and Insurance Regulatory Commission (CBIRC) interviewed senior executives of property developer Evergrande Group on Thursday, demanding that efforts be made to maintain operational stability and actively resolve debt risks in order to protect real estate and financial markets.

Evergrande issued a response in the early morning of August 20, affirming that it would fulfill its responsibilities, not disseminate and quickly clarify false information in accordance with laws and regulations, and fully implement government requirements.

In addition, Reuters reported on August 19 that Evergrande Group was negotiating with Xiaomi to sell part of its 65% shares in Evergrande Auto. Evergrande then issued a statement the following morning, saying that they had held a preliminary exchange with Xiaomi during the introduction of strategic shareholders, but did not discuss any transaction in depth.

SEE ALSO: China Evergrande Group in Negotiations to Sell Automobile and Property Management Businesses

A spokesman for Xiaomi on the same day responded that “Xiaomi has indeed contacted car-making teams from all walks of the industry but has not made any resolution on cooperation intention. Xiaomi will no longer respond to market rumors, please keep in touch with our official announcements.”

On August 10, Evergrande Auto announced on HKEx that Evergrande Group, the controlling shareholder of the company, was contacting potential independent third-party investors to discuss the sale of some of its assets, including some of its interests in the company.

Yan Yuejin, research director of real estate services company E-House, said in an interview with STCN that for Evergrande, selling its high-quality assets could greatly alleviate the company’s financial pressure at this stage. Such sale plans helped calm creditors, indicating that the liquidity of enterprises could improve in the future.