China Evergrande Group’s financial woes have spilled over to Sweden, with a unit of the company’s electric vehicle (EV) arm in talks to find new backers after cutting 300 jobs.
“I’m acting as if things won’t be working out with Evergrande,” Stefan Tilk, the CEO of National Electric Vehicle Sweden AB, also known as NEVS, said in an interview. “Therefore we have entered discussions with new intended owners or project financiers.”
He declined to name them, citing non-disclosure agreements.
Photo: Bloomberg
Chinese property developer Evergrande is battling to stay afloat as it contends with more than US$300 billion in liabilities. The fallout has rippled through China’s economy and global financial markets, and its Hong Kong-listed EV arm is also facing a battle for survival.
Evergrande New Energy Vehicle Group Ltd (NEV) has missed salary payments to some employees, fallen behind on paying suppliers and even stopped free lunches for workers at its research center. As recently as April, it was valued at more than the Ford Motor Co, before a precipitous decline that wiped out almost US$83 billion in market cap.
NEVS in August gave termination notices to nearly half its 670 workers at the former Saab factory in Trollhattan. There is “no major activity” in the plant, Tilk said.
“The Evergrande situation triggered the decision,” he said. “These are things I had wanted to do for some time, but now it became necessary, given that Evergrande no longer can finance us.”
Tilk said his unit still has money to pay its workers. “I can’t give an exact date, but we can still manage,” he said. “We are talking beyond a few months.”
Evergrande NEV last week warned of a “serious shortage of funds,” making it likely to miss its delayed target of starting mass production next year. The closest the public has come to seeing the cars is the nine models it had on display at flashy exhibit at April’s Shanghai auto show.
As NEVS has a license to manufacture vehicles in China, and a factory in Tianjin, Tilk is resting his hopes on the company being able to play a key role in Evergrande’s ambition to bring a car to market.
“If there’s an asset they own outside of China that they care about, it’s NEVS,” Tilk said. “We are an essential piece of the puzzle for them to be able to manage their venture. The question mark is whether they have enough funds, stakeholders, if they’ll be able to invest further. I don’t know.”
NEVS was founded in 2012 and bought Saab’s assets out of bankruptcy, before running into financial difficulties of its own. It put production of its Saab 9-3 on hold in 2014 before entering into debt reorganization that lasted almost a year.
Evergrande first invested in the company in early 2019 through its EV arm, before lifting its stake later that year.
The deal was part of an acquisition spree by Evergrande founder Xu Jiayin (許家印) as he embarked on an ambitious push to overtake Elon Musk’s Tesla Inc. as the world’s biggest EV maker — a goal that is looking increasingly unreachable as he struggles to rescue his debt-laden empire.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS