Evergrande Auto announced on the evening of June 26 that discussions about a potential share transfer are still ongoing, but the sale and purchase agreement and credit agreement have not yet been signed.
Evergrande Auto also stated in the announcement that the potential transaction may or may not proceed as the potential transaction is subject to further due diligence and the sale and purchase agreement and credit agreement are confirmed after they are signed, and subject to the terms and conditions of the agreement. The Company strongly advises shareholders and potential investors to exercise caution in purchasing shares.
In addition, it was also revealed in the terms of the agreement that the potential purchaser would provide a loan to the Company to fund the Group’s continuing operations and the development of the Group’s electric vehicle business. Evergrande Auto admitted that the company is currently in serious shortage of funds, and the Tianjin plant has ceased to produce since the beginning of this year.
According to the 2023 financial report disclosed by Evergrande Automobile on March 27, as of December 31, 2023, Evergrande Automobile’s cumulative loss has reached 110.841 billion yuan, of which the loss in 2023 is about 12 billion yuan. As of the end of 2023, Evergrande Automobile’s total assets were 34.851 billion yuan, and its total liabilities were 72.543 billion yuan, of which 26.484 billion yuan were borrowed; During the same period, Evergrande Automobile’s cash and cash equivalents amounted to $129 million, which was far from sufficient to cover borrowings.