Following the proposal of the shareholders, China’s Evergrande New Energy Vehicle Group will dispose of two subsidiaries and will undergo restructuring, according to a firm’s filing with the Hong Kong stock exchange, recently.
The filing noted that as per the recent voting done by the shareholders, more than 50% of the votes favoured the proposal raised in late April. The EV unit on April 25 announced the plan to sell two debt-laden companies to another unit under China Evergrande as part of the auto firm’s restructuring.
The firm disclosed in its previous stock filing that the EV unit was expected to book a $3.6 billion gain from the transfer,while the two companies to be sold held 47 property projects altogether.
With this, the EV unit could now focus on the new energy vehicle segment and could help improve its valuation and eventually. “It may help to attract investors to Evergrande Auto and raise funds,” said a separate filing by the group company.
It was also revealed in its filing that China Evergrande had received an enforcement notice issued by a court in Southern Chinese city of Guangzhou, covering the company, its controlling shareholder Hui Ka Yan and a property development subsidiary.
Further, both the firms viz. Hui and Evergrande were requested to fulfil their repurchase obligation worth around 5 billion yuan ($700 million) after a deal dispute,in addition to other payment duties including outstanding dividends, liquidated damages and legal fees, the filing informed.