Evergrande EV warns of losing key assets as local governments demand subsidy repayment
(Reuters) - China Evergrande New Energy Vehicle Group faces the risk of losing assets such as land and equipment, the company said on Tuesday, as local administrative bodies demand repayment of 1.9 billion yuan ($261.91 million) in subsidies by its units.
The local bodies last month sent a letter of demand asking unit Evergrande Automotive Holdings to terminate a series of investment cooperation agreements made between the parties since April 29, 2019.
If the decision by the relevant local administrative authority is implemented, it "would result in the Group being exposed to the risks of compulsory resumption of land of the relevant plants, and the buildings and equipment thereon being used for repayment of the said incentives and subsidies," the EV unit of China Evergrande said on Tuesday.
Another unit, Evergrande New Energy Vehicle (Tianjin) Co, also received a notice ordering it to make rectifications regarding three issues raised, and stop producing and selling new energy passenger vehicles.
The group intends to submit the appeal and rectification materials to the authority before the time limit, it added.
($1 = 7.2543 Chinese yuan renminbi)
(Reporting by Ayushman Ojha; Editing by Anil D'Silva and Sriraj Kalluvila)
