Rumors of Sale Surrounding Hengda Motors: "Electric Vehicle Shipments Starting Early Next Year"

Evergrande Group Faces Default Crisis... Bond Interest Due Today Unpaid Again

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Suhwan] Evergrande Automobile, the electric vehicle subsidiary of Evergrande (恒大·Evergrande), China's second-largest real estate developer facing a debt default crisis, has revealed plans to ship some finished products and deliver them to customers for the first time starting next year.

According to Evergrande Automobile's official website on the 12th, President Liu Yongzhuo stated at the 'Strategic Cooperation Partner Meeting' held the previous day that electric vehicles would be shipped from the Tianjin factory starting early 2022, with the first model being the Hengchi 5.

Evergrande Automobile has recently fallen into a management crisis due to the liquidity problems of its parent company, failing to pay some suppliers and employees, but this time it expressed its determination to normalize production.

On the same day, Evergrande Automobile's stock price surged more than 15% intraday on the Hong Kong stock market.

However, President Liu did not specify the scale of mass production expected in early next year.

Evergrande founder Xu Jiayin established Evergrande Automobile in 2019 with capital of $2 billion (approximately 2.4 trillion KRW) to enter the electric vehicle market.

Since then, Evergrande aggressively expanded its business, maintaining substantial investments from local governments. It also presented an ambitious blueprint to produce over one million electric vehicles annually at factories in China and overseas by 2025.

By the end of last year, the funds invested in Evergrande Automobile had reached 47.4 billion yuan (approximately 8.8 trillion KRW).

However, Evergrande Automobile has yet to unveil even a prototype vehicle, leading to ridicule that the business is being conducted solely through PowerPoint presentations in press releases.

Industry insiders widely speculate that Evergrande is likely to sell Evergrande Automobile soon.

Recently, Chinese media reported that Evergrande is negotiating with Xiaomi, which has just entered the electric vehicle business, about selling Evergrande Automobile.

Evergrande's liquidity crisis, burdened with over 300 trillion KRW in debt, continues.

Evergrande failed to pay $83.5 million (approximately 100 billion KRW) and $47.5 million (approximately 56.9 billion KRW) in interest on dollar bonds due on the 23rd and 29th of last month, respectively, and if the 30-day grace period passes, an official default declaration may be issued.

Additionally, it is reported that Evergrande has not paid $148 million (approximately 180 billion KRW) in bond interest due by this day, escalating the risk of Evergrande's bankruptcy.

Originally, Evergrande Group was supposed to pay the bond interest by 1 p.m. Korean time on this day, but major foreign media reported that bondholders have not received any contact from Evergrande.

This content was produced with the assistance of AI translation services.