By Jiahui Huang
Shares in the electric-vehicle unit of defaulted property developer China Evergrande Group fell sharply after talks for a stake sale in the company fell through.
China Evergrande New Energy Vehicle's stock was 10% lower at 30 Hong Kong cents, or 4 U.S. cents, by midday Monday.
The company, also known as Evergrande Auto, said late Friday that liquidators have ceased discussions with an unidentified potential buyer for a stake sale. It said the liquidators will continue to seek possible buyers and opportunities to divest the shares in the company, though there is no certainty that such a transaction will occur.
In late May, the EV startup said liquidators were in talks to sell a 29% stake in the company to an unnamed buyer, with an option to sell an additional 29.5% stake.
Evergrande Auto once had ambitions of competing with Tesla and becoming a top EV maker in China. It had a market capitalization of more than $80 billion at its peak in April 2021.
In the first half of 2024, the company nearly tripled its net loss to 20.25 billion yuan, equivalent to $2.84 billion, from a year earlier.
Shares in Evergrande Auto have declined 41% this year, compared with the benchmark Hang Seng Index's 21% gain.
Parent company Evergrande Group was ordered to liquidate in late January by a Hong Kong court after the developer failed to reach a restructuring plan with creditors.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
October 28, 2024 00:59 ET (04:59 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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