Shareholders of Evergrande’s EV unit agree on restructuring deal

By Xie Yu

HONG KONG (Reuters) – Shareholders of China Evergrande New Energy Vehicle Group accepted a proposal to dispose of two subsidiaries in a restructuring, according to a filing with the Hong Kong stock exchange on Friday night.

More than 50% of the votes under the EV company, a unit of embattled property developer China Evergrande, were cast at a Friday general meeting in favour of a proposal raised in late April, the filing said.

The EV unit on April 25 announced the plan to sell two debt-laden companies to another unit under China Evergrande as part of the auto firm’s restructuring.

The EV unit was expected to book a $3.6 billion gain from the transfer, while the two companies to be sold held 47 property projects altogether, said a previous stock filing by the EV unit.

The deal would help the EV unit focus on the new energy vehicle segment and could help improve its valuation and eventually “may help to attract investors to Evergrande Auto and raise funds”, said a separate filing by the group company.

China Evergrande said in another filing on Friday that it had received an enforcement notice issued by a court in southern Chinese city of Guangzhou, covering the company, its controlling shareholder Hui Ka Yan and a property development subsidiary.

Hui and Evergrande were requested to fulfil their repurchase obligation worth around 5 billion yuan ($700 million) after a deal dispute, on top of other payment duties including outstanding dividends, liquidated damages and legal fees, the filing said.

($1 = 6.9121 renminbi)