Troubles at Evergrande Group Weigh on NWTN’s Investment

Shares of China Evergrande Group and its electric-vehicle unit, Evergrande New Energy Vehicle, took a hit on Monday due to ongoing troubles at the beleaguered property developer. The Dubai-based automaker, NWTN, has decided to suspend its obligations under the share subscription agreement with Evergrande Auto due to uncertainties surrounding Evergrande Group, including an investigation into its chairman, Hui Ka Yan.

Evergrande Auto shares resumed trading on Monday after a suspension since September 28. In August, NWTN had committed to investing $500 million for a 28% stake in Evergrande Auto, a move aimed at assisting the expansion of the EV maker’s factory that had been delayed as a result of its parent company’s financial difficulties.

As of now, NWTN is not obliged to provide the remaining tranches of transitional support to Evergrande Auto, according to a letter from NWTN to the Hong Kong stock exchange. However, this letter does not terminate the share subscription agreement. Evergrande Auto has expressed its willingness to negotiate adjustments to the proposed transactions with NWTN.

Evergrande Group has been immersed in financial troubles, with its chairman under investigation for potential criminal wrongdoing and billions of dollars of unpaid debts owed to lenders, contractors, and suppliers. Additionally, regulators have blocked parts of the company’s turnaround plan. NWTN has sought clarification on Evergrande Group’s debt-restructuring plans and any new restructuring plans that may be in place.