Business Essentials for Professionals


Evergrande's Swedish Electric Vehicle Business Is Up For Sale, Said CEO

Evergrande's Swedish Electric Vehicle Business Is Up For Sale, Said CEO
As its Chinese parent fights to make payments on more than $300 billion in debts, China Evergrande Group's Swedish electric vehicle business unit is in discussions with the United States and European venture capital companies and industrial partners to find a prospective buyer for the Chinese owned electric vehicle firm, according to its top executive.
According to its Chief Executive Stefan Tilk of the National Electric Vehicle Sweden (NEVS) AB, which is owned by the cash-strapped Chinese property developer, there is enough cash with the vehicle maker to last "for a long time" and that interest in purchasing the company has been expressed by a number of investors.
He was however adamant about not commenting on a possible valuation. According to a report published by the news agency Reuters, it could be worth up to $1 billion, according to a source familiar with the situation.
Three interest payments on its international bonds have already been missed by Evergrande and this has forced the once second biggest property developer of China to sell some of its assets in order to raise cash.
Billions of dollars in companies that develop automotive technology, including NEVS, have been invested by the Chinese real estate developer. It has also created joint ventures with Hofer in Germany and Koenigsegg in Sweden.
The Swedish arm of Evergrande's EV unit, Evergrande New Energy Vehicle Group, NEVS was given an electric vehicle production license in China four years ago.
While not naming the companies and entities, Tilk said negotiations are being held between NEVS and European and American companies about a possible sale or other forms of financing.
"We are in dialogue both with venture people and companies that have the same idea and direction as us and want to get into this with our full competence," he told Reuters. "So they are both industrial partners and venture capitalists."
It was still looking for new investors and to make asset sales, Evergrande NEV warned in recent stock exchange filings. It also has said that if no buyer or new investor was found for the company, it would find it difficult to pay salaries to employees and fund other expenses.
In August, NEVS had given notice of redundancy to almost 50 per cent its about 650 workers, and Tilk believes that NEVS will be able to rehire staff to gain the expertise Evergrande seeks in Europe if Evergrande survives the crisis.
"If Evergrande can continue its operations, which they hope to do, they will be interested in having a footprint in Europe, with infrastructure like a plant, tests, lab. And we have that," he said.
Meanwhile, NEVS, which acquired Saab's assets in 2012, is concentrating on developing PONS, which is the company’s mobility ecosystem and is an autonomous ride-sharing network for smart cities and university campuses.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc