According to the announcement of the Hong Kong Stock Exchange on January 8,Evergrande Automobile will temporarily suspend trading starting from 9:00 this morning. It is worth mentioning that on the evening of January 1, Evergrande Automobile issued an announcement on the Hong Kong Stock Exchange, stating thatThe Newton Group Share Subscription Agreement and the Debt-for-Equity Swap Subscription Agreement have expired on December 31, 2023.
In August last year, Evergrande Automobile said it had received a strategic investment of approximately US$500 million from Newton Group, headquartered in Dubai, United Arab Emirates, and stated that "this partnership with Middle Eastern capital will effectively solve the financial problems faced by Evergrande Automobile's development."
In addition to the first strategic investment of US$500 million from Newton Group, Evergrande Automobile will receive an additional RMB 600 million in transitional funds starting from five working days after the announcement. All strategic investment funds will be used at the Evergrande Automobile Tianjin factory to ensure the normal production of Hengchi 5 and the continuous mass production of Hengchi 6 and 7.
In addition to large amounts of financial support, Newton will also assist Evergrande Automobile to develop overseas markets and export 30,000-50,000 Hengchi vehicles to the Middle East market every year.
However, on the evening of September 28, 2023, China Evergrande announced on the Hong Kong Stock Exchange that the company received a notice from relevant departments.The company's executive director and chairman of the board of directors, Xu Jiayin, has been subject to compulsory measures in accordance with the law due to suspicion of illegal crimes.
Two months later, in November last year, Newton Group stated that due to the temporary suspension of Evergrande Automobile and a series of recent changes in Evergrande Group, the company decided to suspend the performance of relevant obligations in the share subscription agreement, that is, to suspend the second and third payments of funds to Evergrande Automobile.
Until the agreement expired at the end of last year, Evergrande did not receive subsequent capital injection from Newton Group.