Property giant China Evergrande Group‘s EGRNF subsidiary China Evergrande New Energy Vehicle Group Ltd. EVGRF is at risk of discontinuing production of its electric vehicles.
What Happened: China Evergrande New Energy Vehicle Group Ltd is at risk of discontinuing production, given that it is unable to procure additional liquidity, the company said in a statement.
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The company will launch multiple flagship models and hopes to achieve mass production if its able to obtain an investment of over RMB 29 billion ($4.25 billion), the company added.
Under that plan, the total unleveraged cash flow from 2023 to 2026 is projected to be between negative RMB 7 billion ($1.03 billion) and negative RMB 5 billion ($732.2 million).
As of March 22, the group delivered 900 units of its first electric vehicle, the Hengchi 5. The company said that it resorted to cost cutting measures, including staff reduction and optimizing employee structure in its Swedish unit, to make the mass production of the electric SUV possible.
The group is currently considering the disposal of residential and property development projects.
Last week, The Wall Street Journal reported that the EV maker’s parent company China Evergrande, is close to striking a debt-restructuring deal with foreign bond investors.
The property company defaulted on its U.S. dollar bonds more than a year ago and has $22.7 billion in offshore debt, making it the world's most indebted property developer.
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Read More: Is The Evergrande Crisis Over?
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