At the end of July, on the occasion of Evergrande's resumption of trading, the company had revealed at the time that capacity utilization at its Tianjin plant was affected by financial constraints and that there were cases where employees' salaries could not be paid in a timely manner.。The company said at the time that it was planning to raise about $500 million through equity and / or debt financing to meet the production and marketing needs of HSI 5 and the company's normal operating capital needs.。To this end, the company has been discussing financing with potential investors, but has not yet entered into any final agreement.。

After half a month, this mysterious potential investor has finally been unveiled。

On the evening of August 14, Evergrande Motor announced that the company had received a strategic investment of about $500 million from the US-listed company Newton Group.。In addition, Newton Group will provide three transition funds (totaling RMB 600 million) for the Group's automotive research and development, production and sales business.。

Newton Group (NWTN) is a green energy company incorporated in the Cayman Islands in which the UAE National Sovereign Fund holds a portion of the shares.。Newton Group was listed on the Nasdaq Stock Exchange in November 2011 and was the first UAE New Energy company to list in the United States.。The company is mainly engaged in the development and commercialization of high-end electric vehicle products and green energy solutions, and currently has a vehicle assembly plant in Abu Dhabi。It is understood that in addition to new energy vehicles, Newton Group also laid out photovoltaic power generation, green hydrogen production and energy storage and other clean energy industry chain, footprint expanded to the Middle East, North Africa, China and other Asian and European countries。

Although the Newton Group was "born" in the Middle East and the United Arab Emirates, its core is "Chinese heart."。The Newton Group was founded by Chinese entrepreneur Wu Nan, who currently indirectly owns the Newton Group 76.98% of voting rights。In addition, the names of the executives disclosed by the company mostly contain pinyin, which is likely to be Chinese as well.。

For this subscription transaction, specifically, Evergrande Auto will be allotted and issued new shares, and Newton Group, as the subscriber, will subscribe for 61 at the total subscription price..7.7 billion subscribed shares at a subscription price of 0 per share.HK $6297。As of the date of this announcement, the subscription shares of the Newton Group amounted to approximately 56% of the total number of shares outstanding..96%。Upon delivery, the Newton Group subscription shares will represent approximately 27% of the total number of shares outstanding..50%。Evergrande Group and Mr. Xu will hold 112.1.6 billion shares, accounting for approximately 49% of the total issued shares..93%, which means Evergrande Auto will no longer be a wholly owned subsidiary of Evergrande Group。

And after the compulsory exchangeable bonds are exchanged in full, Evergrande's holdings will be further diluted.。

The exchangeable bonds mentioned here are related to China Evergrande's foreign debt restructuring plan.。In its restructuring plan, there is an option for creditors to choose to convert their holdings of bonds into a combination of five equity-linked notes linked to Evergrande Property, Evergrande Auto or China Evergrande's listed shares, in a manner that includes their guaranteed, linked, compulsorily exchangeable or compulsorily convertible counterparts.。

Under the debt-for-equity agreement, the total outstanding principal and interest on Evergrande's loans is approximately 209.HK $500 million, will be paid at a rate of 3 per share..HK $84 to HK $54.4.1 billion new shares (representing approximately 33% of the total number of shares after the completion of the debt-to-equity swap.52%)。Currently, Evergrande's public shareholding is about 41.39%。After the completion of the debt-to-equity swap, public ownership will fall to approximately 31.08%。

Upon completion of the debt-to-equity swap and share subscription, Evergrande Group's shareholding will be reduced to 21.75%。By contrast, the Newton Group holds 27.50% stake, which would make it Evergrande's largest shareholder。

Newton Group will have the right to nominate directors and senior management once it becomes the company's largest shareholder。According to the announcement, if necessary, Newton Group has the right to nominate three candidates to be considered as directors and members of various committees of the Board of Directors, and one of the directors will serve as Chairman of the Board of Directors.。In addition, Evergrande Group's special group of foreign US dollar bond creditors, as well as Evergrande Group, will have the right to nominate one candidate each to be considered as a director and a member of each committee of the Board of Directors.。

Currently, Evergrande's board of directors has three executive directors and three independent non-executive directors.。

The announcement also mentions that if Evergrande Group and / or Evergrande Group's helm, Xu Jiayin, wishes to transfer shares directly or indirectly within the next two years, it must obtain the written consent of Newton Group, and Newton Group has the right of first refusal to purchase such shares.。

In addition to the US $500 million strategic investment, Newton (Zhejiang) Automobile Co., Ltd. (a subsidiary of the Newton Group) will provide three guaranteed interest-free transitional funds for Evergrande New Energy Automobile (Tianjin) Co., Ltd. (a subsidiary of Evergrande Automobile), all of which are RMB 200 million.。

Specifically, the first fund shall be paid within 5 working days after the signing of the transitional fund support agreement, the second fund shall be paid within 40 working days after the first fund is paid, and the third fund shall be paid within 15 working days after the second fund is paid.。

Evergrande Auto has indicated that it intends to transfer the net proceeds from the share subscription (approximately 38.HK $300 million) for the development, production and sales of vehicles and the repayment of transitional support funds.。By the end of May 2023, Hengchi 5 has delivered more than 1,000 vehicles. Evergrande's next goal is to launch and produce Hengchi 6 and Hengchi 7。

Evergrande believes that the cooperation between the two is "complementary."。Evergrande said that by using its existing vehicle platform, Newton Group can significantly shorten its time to market and reduce the risks associated with the development of business execution for mass-produced smart electric vehicle products。Evergrande believes that Hengchi is highly complementary to Newton Group's planned Ada and Muse models, which will help both meet the different needs of consumers and further expand Evergrande's share of the global new energy vehicle market.。

Newton Group said it believes Evergrande can help meet the demand for electric vehicles in the Middle East, including the UAE。It is reported that the Newton Group will assist Evergrande Motor to explore overseas markets, to achieve annual exports to the Middle East market 30,000-50,000 Hengchi cars。

At present, the transaction is subject to conditions including the completion of Evergrande Group's debt restructuring and regulatory and shareholder approval, and the two companies expect the transaction to be completed in the fourth quarter of this year.。

Recently, the news of cooperation between Chinese car companies and Middle Eastern companies has begun to increase.。In June, NIO received CYVN Holdings L from Abu Dhabi Sovereign Investment Fund..L.C.Up to $700 million in strategic investment funds。In the same month, Nezha Automobile and Jordan Tahboub Automobile Company held a strategic signing conference, the two sides will cooperate in vehicle sales, after-sales service and other aspects, Nezha GT will also be listed in Jordan。In addition, at the China-Arab Cooperation Forum held in June, the Saudi Ministry of Investment and Chinese electric vehicle manufacturer Chinese Express (which owns the new energy vehicle brand "Gaohe Automobile") signed an agreement worth 21 billion Saudi riyals (about 5.6 billion U.S. dollars).。

At present, China's auto companies are highly competitive, and some start-ups are gradually running out of money in the competition, so they urgently need external investment to solve their urgent needs.。On the other hand, many Middle East sovereign funds or companies are looking for a transformation direction, green energy related is their preference.。This has led to the recent frequent investment of new energy vehicle companies from the Middle East.。

Now, Evergrande has also received "life-saving funds" from the Middle East.。And Evergrande's auto industry has revealed its willingness to "go to sea."。It's hard to fight in China, maybe "going to sea" is the turning point of Evergrande, let's wait and see。