The shares of the electric vehicle subsidiary of Evergrande, the Chinese real estate developer in great difficulty, were down sharply on Monday, after the cancellation of a proposed IPO.
Evergrande New Energy Vehicle shares fell more than 10% on the Hong Kong Stock Exchange, falling to HKD 1.95, after the company announced on Sunday that it was withdrawing from listing on the Shanghai Stock Exchange.
The giant real estate developer is drowning in debt of 260 billion euros and warned in mid-September that it may not be able to honor its commitments. The fear of bankruptcy of this Chinese colossus destabilized global financial markets last week.
In a statement released on Sunday, Evergrande NEV explained that its parent company’s cash flow problems would have “a negative material impact” on its plans to produce large-scale electric cars.
Evergrande NEV acknowledged that “nothing guarantees that the group will be able to honor its financial commitments”.
The subsidiary, which dreamed of competing with the electric vehicles of the American Tesla, very popular in China, has already lost 80% of its value on the stock market since the beginning of the year.
The conglomerate for its part somewhat reassured the markets last week by announcing a last-minute agreement with Chinese bondholders. But Evergrande also had to pay interest on a dollar loan, a deadline that passed Thursday without the group announcing whether or not it had made the payment.
Another deadline falls on Wednesday: the payment of $ 47.5 million in interest on another international loan in dollars.
The Chinese state has still not announced whether or not it intends to fly to the aid of the private giant. Experts speculate that Beijing could inflict on Evergrande a restructuring similar to that undergone in recent years by the conglomerates Anbang (insurance) or HNA (air transport).
The Financial Times reported Monday that at least two Chinese local governments had seized the revenue collected by Evergrande for the construction of housing, in order to ensure that the developer completes the properties in question.
Buyers demonstrated last week in front of Evergrande offices in several regions of the country to demand the completion of the work or a refund of sums already paid.