China Evergrande Group has agreed to sell a 27.5 percent stake in its electric vehicle (EV) unit, China Evergrande New Energy Vehicle Group (Evergrande NEV), to Dubai-based startup NWTN for $500 million.
The deal, which is subject to regulatory approvals, will give NWTN a majority stake in Evergrande NEV and the right to nominate a majority of its board of directors.
The sale is part of Evergrande’s efforts to raise cash to pay off its debts.
The property developer is facing a liquidity crisis and has been struggling to meet its financial obligations.
Image: Evergrande
The sale of the EV unit is a major setback for Evergrande, which had planned to become a major player in the global EV market.
NWTN is a little-known company that was founded in 2016 by Chinese entrepreneur Alan Nan Wu.
The company is focused on developing and manufacturing electric vehicles for the Middle East market.
The deal with Evergrande NEV gives NWTN a major foothold in the Chinese EV market, which is the world’s largest.
The sale of the EV unit is a sign of the growing financial difficulties facing Evergrande.
The company has been struggling to meet its debt obligations for months, and the sale of the EV unit is a way to raise cash to avoid defaulting on its loans.
The deal is also a setback for Evergrande’s ambitions to become a major player in the global EV market.The following are some of the key details of the deal:
- NWTN will invest $500 million in Evergrande NEV in exchange for a 27.5 percent stake in the company.
- NWTN will gain the right to nominate a majority of Evergrande NEV’s board of directors.
- The deal is subject to regulatory approvals.
- The deal is expected to close in the fourth quarter of 2023.
The deal is a major setback for Evergrande, but it is a necessary step for the company to avoid defaulting on its loans.
The sale of the EV unit will give Evergrande some much-needed cash, but it will also reduce its stake in a potentially lucrative business.
The future of Evergrande NEV is uncertain, but the deal with NWTN gives the company a chance to survive and thrive.
