Today (May 27), the Hong Kong Stock Exchange announced that the shares of China Evergrande New Energy Vehicle Group Co., Ltd. (Evergrande Auto) will resume trading from 9:00 am this morning. The suspension period for Evergrande Auto this time is ten days.

After opening today, Evergrande Auto opened high and closed at HKD 0.71, up over 86%.

On the evening before resuming trading, Evergrande Auto announced that 29% of its shares would be acquired.

The announcement mentioned that on May 16th, the company was informed that the joint and individual liquidators and representatives of China Evergrande Group (under liquidation), Evergrande Health Industry Group Co., Ltd ,Acelin Global Limited ( "Potential Seller") enters into a term sheet with a third-party buyer ("Potential Buyer") independent of the Company and its affiliates. Based on this, the potential seller and potential buyer may enter into a final purchase and sale agreement for the shares of the company held by the potential seller. Meanwhile, the potential buyer is identified as independent of the company and its affiliates.

As of the announcement date, potential sellers jointly hold 6.348 billion shares of Evergrande Auto, accounting for 58.5% of the company's total share capital ("potential unsold shares"). After reaching a purchase and sale agreement and being bound by its terms and conditions, the preliminary plan is to immediately acquire 3.145 billion potential unsold shares of Evergrande Auto, which account for approximately 29% of the company's issued shares. At the same time, there are 3.203 billion potential shares for sale, accounting for 29.5% of the company's issued shares, which will become the subject of a feasible option for potential buyers to exercise within a certain period of time after the purchase and sale agreement date.

In addition, Evergrande Auto stated that the terms sheet mentions the signing of a credit agreement. According to this agreement, potential buyers (or third parties designated with the company's consent) will provide credit lines to Evergrande Auto to support the group's continued operation and drive the development of the group's electric vehicle business.

Evergrande Auto openly mentioned its funding shortage dilemma in its announcement. To put it bluntly, it is facing a serious shortage of funds. And it stated that the factory in Tianjin has stopped production operations since the beginning of this year. As of now, the factory has not resumed production.

It is worth noting that Evergrande Auto's Tianjin factory ceased production in April last year and announced a full resumption of production in May last year.

Since the beginning of this year, Evergrande Auto has been plagued by multiple disasters.

At the beginning of this year, Evergrande Auto announced that the Middle Eastern "tycoon" Newton Group, which had originally planned to inject capital into it, would not provide any money. Evergrande Auto stated that the respective deadlines for the Newton Group share subscription agreement and the debt to equity subscription agreement are December 31, 2023. However, prior to the deadline, the parties to the Newton Group's share subscription agreement and debt to equity subscription agreement did not agree to an extension of the deadline. Therefore, the Newton Group's share subscription agreement and debt to equity subscription agreement have expired on December 31, 2023.

The above-mentioned share subscription agreement refers to the approximately $500 million strategic investment injected by Newton Group into Evergrande Auto. At the same time, Newton Group provided three guaranteed interest free transitional funds (totaling RMB 600 million) to Evergrande Auto. The debt to equity swap agreement refers to creditors such as Evergrande Group and Xu Jiayin subscribing to new shares of Evergrande Auto to offset the outstanding debt of HKD 20.895 billion owed by Evergrande Auto.

Newton Group has stated that it will assist Evergrande Auto in expanding its overseas markets and achieve an annual export of 30,000 to 50,000 Hengchi cars to the Middle East market. According to previous disclosures by Evergrande Auto, as of the end of last year, the company had delivered a total of 1,389 vehicles.

The owner of the fund is no longer giving money, and relevant local government departments are also requesting Evergrande Automobile to refund nearly 2 billion yuan in rewards and subsidies.

On May 22nd, Evergrande Auto announced that its subsidiary, Evergrande New Energy Vehicle Investment Holding Group Co., Ltd., and other subsidiaries were required by relevant local governments to terminate a series of investment cooperation agreements signed in 2019 and return a total of approximately 1.9 billion yuan in rewards and subsidies that had been issued.

Regarding this, Evergrande Auto stated that its affiliated companies currently plan to send letters to relevant local administrative departments for coordination. Evergrande Auto warns that if executed in accordance with the above letter, it will have a significant adverse impact on the financial condition and operations of the company or its related subsidiaries.