China's Evergrande EV ordered to repay $262 mln subsidies, faces asset seizure

AFP , Tuesday 11 Jun 2024

China has ordered the deeply indebted Evergrande conglomerate's electric car subsidiary to repay $262 million in subsidies for failing to meet its contractual obligations or risk having its assets seized, the company announced on Tuesday.

Evergrande
Evergrande, once China s leading property developer with interests in multiple sectors, has been strangled by surging debt, estimated in June 2023 to be worth some $328 billion. AFP

 

Evergrande, once China's leading property developer with interests in multiple sectors, has been strangled by surging debt, estimated in June 2023 to be worth some $328 billion.

"The relevant local administrative authority considered that (Evergrande New Energy Vehicle Group and its subsidiaries)... have committed breach of contracts" by failing to disclose their financial results as required, the company said in a press release.

The manufacturer said that Evergrande New Energy Vehicle Group has been ordered to pay back some 1.9 billion yuan ($261.9 million) within 15 days.

The decision exposes Evergrande's car subsidiary "to the risks of compulsory resumption of the land of the relevant plants, and the buildings and equipment thereon being used for repayment of the said incentives and subsidies," it added.

The indebtedness of Evergrande has scuppered the electric carmaker's ambitions and limited its cash flow, while sales of its vehicles have struggled to take off.

When Evergrande's car making subsidiary was founded in 2019, it set a three to five year goal to become the most powerful manufacturer of electric cars in the world.

Search Keywords:
Short link: