China Evergrande New Energy Vehicle Shares Plunge After it Pulls Plug on CNY Shares Issuance
By Gina Lee
Investing.com – China Evergrande New Energy Vehicle Group Ltd.’s shares plunged on Monday after it said on Saturday that it is abandoning a plan to issue CNY shares on Shanghai’s Science and Technology Innovation Board.
The electric vehicle unit of China Evergrande Group (HK:3333) also warned that it has an uncertain future unless it got a swift injection of cash.
China Evergrande New Energy Vehicle’s Hong Kong shares tumbled 10.31% to HK$2 ($0.26) by 12:39 AM ET (4:39 AM GMT), after plunging up to 26% and hitting HK$1.66 earlier in the session. China Evergrande shares were steady at HK$2.36.
The warning, issued after the market closed on Friday, was the latest sign that the property developer’s liquidity crisis is spreading to other business units.
However, concerns that a collapse at China Evergrande could drive a global economic contagion have ebbed for some investors.
“I think the markets have priced in that on the balance of probabilities, the shock and awe are over,” IG Markets analyst Kyle Rodda told Reuters.
“Markets are really just expecting from here on in, a company that is doomed to failure but one which won’t be allowed to result in major risks within the Chinese financial system, or that contagion won’t pervade global markets.”
China Evergrande missed a payment deadline on a dollar bond during the previous week and was granted a 30-day grace period. The company is due to make a $47.5 million bond interest payment on its 9.5% March 2024 dollar bond on Sep. 29.
It currently has liabilities of around $305 billion and is scrambling to raise funds to pay it off. Currently, a meltdown with significant economic impacts, a managed collapse, or a bailout by the Chinese government, the least likely option, are all possible.
China Evergrande NEV Shares Plunge After it Pulls Plug on CNY Share Issuance
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