Liquidators Seek Buyer for Evergrande Electric Vehicle Unit

(Reuters) – Liquidators of the electric vehicle arm of debt-laden China Evergrande (HK:3333) are in discussions with a potential buyer to acquire a stake in the company, aiming to secure new credit to support production.

Initially, the electric vehicle maker sought to compete with Tesla (NASDAQ:TSLA) and had a market valuation that surpassed that of Ford Motor (NYSE:F). However, it has become entangled in the debt crisis affecting its parent, a property developer.

On Thursday, China Evergrande New Energy Vehicle announced that its liquidators have not yet finalized any agreements with a potential buyer or reached a deal to provide additional credit to the electric vehicle manufacturer.

In late May, a non-binding arrangement by the liquidators representing China Evergrande Group, Evergrande Health Industry, and Acelin Global was disclosed, allowing a third-party buyer to acquire a 29% stake in the unit, with an option for an additional 29.5% stake.

The firm revealed in August that two of its units have entered bankruptcy proceedings and has been experiencing significant funding shortages, facing mounting pressure from creditors and local government authorities.