Evergrande’s Swedish electric vehicle unit in sale talks, CEO says
8:47 pm Friday, October 15th, 2021
By Helena Soderpalm and Krystal Hu
STOCKHOLM (Reuters) -The Swedish electric vehicle unit of China Evergrande Group is in talks with U.S. and European venture capital firms and industrial partners to find new owners, its top chief said, as its Chinese parent battles default on more than $300 billion in debts.
National Electric Vehicle Sweden AB (NEVS), owned by the cash-strapped Chinese property developer, has funds to last “for a good while”, its Chief Executive Stefan Tilk said, adding that several investors were showing interest in the firm.
He declined to comment on a possible valuation. A source familiar with the situation told Reuters the unit could be valued at as much as $1 billion.
Evergrande has already missed three rounds of interest payments on its international bonds, and has been scrambling to sell some of its assets to raise cash.
The Chinese property developer has spent billions of dollars on stakes in automobile technology developers, including NEVS. It also has joint ventures with Germany’s Hofer and Sweden’s Koenigsegg.
NEVS, which received an electric vehicle production licence in China four years ago, is the Swedish arm of Evergrande’s EV unit Evergrande New Energy Vehicle Group.
Tilk said that NEVS is discussing a potential sale or other financing mainly with European and U.S. firms, but declined to name them.
“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.”
Evergrande NEV warned in stock exchange filings last month that it was still looking for new investors and to make asset sales, and that without either it may struggle to pay employee salaries and cover other expenses.
Tilk added that NEVS, which gave notice of redundancy to nearly half its roughly 650 workers in August, could hire staff again to get the competence Evergrande wants in Europe if it 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.
In the meantime NEVS, which bought carmaker Saab’s assets in 2012, is focusing on building its mobility ecosystem PONS, an autonomous ride-sharing network for smart cities and university campuses.
(Reporting by Helena Soderpalm in Stockholm and Krystal Hu in New York; Editing by Sumeet Chatterjee and Jan Harvey)
