China Evergrande’s EV unit shares drop after $ 347 million stock placement
HONG KONG, Nov. 22 (Reuters) – Shares of China Evergrande New Energy Vehicle Group Ltd canceled gains to fall as much as 3.1% to HK $ 3.42 late Monday morning, after the company announced its intention to raise approximately $ 347 million per share placement.
Real estate developer China Evergrande’s electric vehicle (EV) unit said on Friday it would issue around 900 million shares, or 8.3% of the enlarged share capital, at HK $ 3 apiece through a follow-up placement .
The new shares are priced at a 15% discount from their Friday close of HK $ 3.53.
Evergrande, the most indebted developer in the world who has stumbled over debt repayment terms as it grapples with more than $ 300 billion in liabilities, said last month it plans to give to the future gives priority to its electric vehicle activity over real estate.
In a document filed Friday evening, Evergrande New Energy Vehicle said it intended to use the proceeds of the research, development and production of its new energy vehicles, paving the way for the production of cars.
The EV unit already made a follow-up earlier this month, raising HK $ 500 million ($ 64.17 million) by issuing 174.8 million shares at HK $ 2.86 each.
Evergrande’s total holdings in the EV unit will drop to 58.54% from 63.84% after the new fundraising.
The unit is seeking Chinese regulatory approval to sell its first Hengchi 5 sport utility vehicles, as the ailing company promises to start manufacturing cars early next year.
Shares of the Evergrande group fell 1%, while the Hang Seng index fell 0.3%. ($ 1 = 7.7914 Hong Kong dollars) (Reportong by Clare Jim; Editing by Tom Hogue and Ana Nicolaci da Costa)