China Everglade electric car unit says vice chairman detainedChina Everglade electric car unit says vice chairman detained

The China Evergreened New Energy Vehicle Group said in Hong Kong that their Vice Chairman, Liu Yangzhou, had been arrested and is now being investigated for possible crimes. The company’s stock value dropped sharply after hearing this news electric car. This is the latest loss for them, as they also had to stop a planned share sale.

Unfortunately, this news may also hurt their parent company, China Evergreened Group, which is the world’s most indebted real estate firm. The business wants to restructure its overseas debts by trading some of it for shares in its electric car branch. With more than $300 billion in debt and about $23 billion in foreign debt, this new turn of events could make things even harder for Evergreened Group to keep its finances in order.

Evergrande NEV said that Liu was being held because they thought he was doing “illegal activities,” but they didn’t say what these activities were.

A report from the end of September also said that Hui Ka Yan, the head and founder of Evergrande Group, was being looked into for possible crime.

As soon as the news came out, trading in the automaker’s shares stopped in the morning. When trade started up again later that day, the price fell by as much as 23%. It did manage to get back to a slightly higher level, but by the end of the day, it was down 7% from where it started.

To make things even worse, Evergrande NEV’s stock dropped sharply by 19% the week before because it had to stop its plan to sell $500 million worth of new shares to NWTN (NWTN.O), which is traded in the U.S. Because of this, it is now only worth HK$4.2 billion ($540 million) on the market.

The company that makes electric cars has had money problems ever since its parent company got into a debt trouble in the middle of 2021. Evergrande NEV has been constantly raising the alarm about the chance that it will have to shut down unless it can get more money.

Evergrande NEV reported a net loss of 6.9 billion yuan ($964 million) for the first half of 2023. This came after 2021 and 2022 had a cumulative net loss of about $10 billion.

At first, Evergrande NEV set a lofty goal of producing one million cars a year by 2025. But in reality, sales were much below this target. For example, the business only sold little more than 760 units of its lone EV model, the Hengchi 5, in the first half of the previous year.

For your information, at that time, $1 was worth 7.1562 Chinese yuan and $1 was for 7.8080 Hong Kong dollars.

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