Special topic: mysterious buyer will acquire 29% shares of Evergrande Auto! The company resumed trading and the share price soared
Source: Beijing Business Daily
Not waiting for the "life-saving money" from Newton Group, Evergrande Auto Then look for "blood transfusion prescription". On May 26, Evergrande Auto announced that, China Evergrande The liquidator of the Group, Evergrande Health Industry Group Co., Ltd., Acelin Global Limited (hereinafter referred to as the "potential seller") and a third party buyer (hereinafter referred to as the "potential buyer") known, known and believed to be independent of the Company and its connected persons after making all reasonable inquiries entered into a term sheet (hereinafter referred to as the "term sheet").
Accordingly, the potential seller and the potential buyer entered into a final purchase and sale agreement (hereinafter referred to as the "purchase and sale agreement") for the purchase and sale of the shares of the Company held by the potential seller (hereinafter referred to as the "shares"). On the date of this announcement, the potential sellers held a total of 6.3479 billion shares, accounting for about 58.5% of all the issued shares (hereinafter referred to as "potential shares for sale"). After the signing of the purchase and sale agreement and subject to its terms and conditions, 3.145 billion potential shares for sale (accounting for about 29% of all issued shares) will be acquired immediately, and 3.203 billion potential shares for sale (accounting for about 29.5% of all issued shares) will become the subject of a exercisable option of the potential buyer within a certain period after the date of the purchase and sale agreement.
Although the announcement did not disclose the relevant information of the potential buyer, the presence of the buyer may ease the financial difficulties faced by Evergrande Automobile. Evergrande Auto mentioned in the announcement that the term sheet also mentioned the conclusion of a credit agreement, and the potential buyer (or the other party designated by it with the consent of the company) will provide it with a credit line. This means that Evergrande Auto may welcome capital entry.
At present, Evergrande Auto is facing great financial pressure. The financial report shows that as of December 31, 2023, the total assets of Evergrande Auto will be 34.851 billion yuan and the total liabilities will be up to 72.543 billion yuan. Among them, borrowings were 26.484 billion yuan, trade and other payables were 43.012 billion yuan, and other liabilities were 3.047 billion yuan. In the same period, the cash and cash equivalents of Evergrande Auto were only 129 million yuan. In addition, Evergrande Auto was also required to return subsidies. On the evening of May 22 this year, Evergrande Auto released an announcement that because it failed to perform its contractual obligations in accordance with the relevant agreement, Evergrande Auto's relevant subsidiaries were required to terminate the agreement and return about 1.9 billion yuan of awards and subsidies that had been issued. Evergrande Automobile said that if the requirements of the letter were finally implemented, it would have a significant adverse impact on the financial situation and operations of the Company or its relevant subsidiaries.
Under the pressure of funds, Evergrande Automobile Tianjin Plant has stopped production. Evergrande Auto mentioned in the announcement that since the beginning of this year, the Tianjin factory has stopped production and has not yet resumed production. It is understood that in September 2022, Evergrande Automobile Tianjin Plant will officially mass produce, but as of December 31 last year, the plant has only produced 1700 Hengchi 5 models. Evergrande Auto said that it would spare no effort to introduce strategic investors to actively raise funds to maintain its survival and future development plans.
However, Evergrande Auto's investment attraction was not smooth. In August last year, Evergrande Auto signed an agreement with Newton Group, which will subscribe more than 6.177 billion shares of Evergrande Auto at a total price of about 3.89 billion Hong Kong dollars, and hold 27.5% of the total issued shares of Evergrande Auto after expansion. At the same time, in order to support the recovery of Evergrande's automobile business, after meeting the preconditions, Newton Group will provide an interest free and guaranteed transitional fund of 600 million yuan for Evergrande's automobile research and development, production and sales business. At that time, Evergrande Auto said that it would effectively solve the financing problem faced by Evergrande Auto's development by holding hands with Middle East capital. From the outside world's perspective, Newton Group's funds are undoubtedly "life-saving money" for Evergrande Auto, which has lost money for years.
However, as a series of preconditions have not been fulfilled, Evergrande Auto released an announcement in April this year that the strategic investment agreement signed with Newton Group was terminated. "As a heavy asset industry, car manufacturing needs to invest a lot of money in research and development, channels, and service systems, and it is expected to amortize costs after achieving large-scale effects in the later stage." Yan Jinghui, a member of the expert committee of the China Automobile Circulation Association, said that the introduction of war investment had failed, further increasing the capital pressure on Evergrande Motors. This time, potential buyers' "blood transfusion" of Evergrande Auto has become the key to its ability to relieve the financial pressure. In the announcement, Evergrande Automobile said that the amount of credit provided by the potential buyer this time would help the Group continue to operate and develop its electric vehicle business.
It is worth noting that Evergrande Auto also mentioned in the announcement that the term sheet is not legally binding, except for confidentiality, transaction restrictions, regulatory laws and jurisdiction and other provisions. The sales agreement and credit agreement have yet to be further negotiated and finalized by both parties, so the final terms of the sales agreement and credit agreement may be different from those listed in the term sheet.
Beijing Business Daily reporter Liu Yang Liu Xiaomeng
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