Evergrande’s electrical automotive unit receives funding to compete with Tesla, Nio in China
Evergrande Group Chairman Xu Jiayin will attend Evergrande New Energy Auto’s Global Strategic Partners Summit in Guangzhou, Guangdong Province, on November 12, 2019.
VCG | Visual China Group | Getty Images
GUANGZHOU, China – Shares in the electric vehicle unit of Chinese real estate giant Evergrande rose up to 67% on Monday after the company raised significant funds through a new share sale.
China Evergrande New Energy Vehicle Group hit an all-time high of $ 50 Hong Kong before cutting some of those profits. The company’s shares closed at 45.35 Hong Kong dollars.
The shares skyrocketed after the Chinese electric car company issued 952.38 million shares to six investors at a price of Hong Kong $ 27.30 for net proceeds of Hong Kong $ 26 billion ($ 3.35 billion).
The funding is another sign that China’s electric car market is warming, and Evergrande could challenge Tesla, as well as domestic competitors like Nio and Xpeng Motors.
Last year Evergrande showed off six new electric vehicles under the Hengchi brand in the hope of starting production this year. The company has not yet sold a single car.
In September, the company raised around $ 4 billion by selling shares to investors, including Chinese internet giant Tencent and hail service Didi.
China Evergrande New Energy Vehicle Group is also preparing to be listed on the Nasdaq-style Science and Technology Innovation Board in Shanghai or the Star Market.
China’s electric car companies have aggressively raised capital to stimulate production and take a leadership role in the competitive market.
Xpeng Motors raised $ 1.5 billion in an initial public offering in the United States last year and secured a line of credit of 12.8 billion yuan ($ 1.98 billion) this month.
This month BYD – the Chinese electric car maker backed by US billionaire Warren Buffett – announced that it had raised $ 29.9 billion by issuing new shares.