Evergrande Auto to raise HK$26 billion by introducing 6 investors

Shanghai (Gasgoo)- Evergrande Auto, the NEV arm of Chinese real estate giant China Evergrande Group, announced on Jan. 24, it agreed with six investors to allot and issue a total of 952,383,000 shares, raising an aggregate of HK$26 billion ($3.354 billion).

The shares to be issued represent roughly 9.75% of the company's enlarged total number of issued shares at HK$27.3 per share. Each investor has agreed to a 12-month lock-up period with regard to the subscription shares. 

Photo credit: Hengchi

“The subscription can strengthen the capital base of the company, accelerate the development of the new energy vehicle segment, and help realize the group's strategic goal to become the world's largest and most powerful new energy vehicle group,” said Evergrande Auto.

The investors include Cosmic Success Holdings Limited, Upper World Limited, Heyirong International Trade Co.,Ltd., Greenwoods Global Investment Limited, Ms Chan Hoi-wan and Mr. Liu Ming Hui.

The company attempts to use the net proceeds to repay indebtedness and further invest in the technology R&D, production of new energy vehicles (NEVs) and general corporate purposes. After deducting the company’s costs and expenses, the gross proceeds and net proceeds from the subscription are estimated to be HK$26,000,055,900 ($3.354 billion) and HK$26 billion respectively.

About four month ago, Evergrande Auto announced it would raise about HK$4 billion ($516.006 million) through the introduction of four investors including Tencent Holdings Limited, Sequoia Capital, Yunfeng Fund and Didi Chuxing.

Evergrande Auto is stepping up its efforts to develop NEV business. Xu Jiayin, chairman of Evergrande Group, said the group planned to invest 45 billion yuan ($5.805 billion) within three years in NEV development, build 10 manufacturing bases around the world, and increase its NEV capacity to 1 million units in three to five years. The company has a total of 14 Hengchi-branded models in works, 6 of which has been launched already.