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Bond Market News
Evergrande EV unit Approved to Begin Selling Vehicles; COGARD Denies Financing Rumors
March 15, 2022
China Evergrande’s electric vehicle (EV) unit has gotten the approval of regulators to begin selling two models of its inaugural car, the Hengchi 5 sport utility vehicle from April. The news gives Evergrande and its unit a sigh of relief after having undergone a tumultuous phase in recent months. In August 2021, the EV unit warned of production delays if it did not secure capital and reported a net loss of RMB 4.822bn ($745mn) at the time. In September 2021, the EV’s planned Shanghai IPO listing was scrapped. Around the same time, Evergrande was trying to sell stakes in its EV unit while it reeling through a debt crisis which ultimately led to defaulting on its dollar bonds in December. Evergrande NEV has not sold a single car till date and makes most of its money from its community health services business and nursing home facilities. Evergrande’s dollar bonds were stable at distressed levels of 9-10 cents on the dollar.
Country Garden (COGARD) denied market rumors that the developer was seeking onshore and offshore financing. COGARD said that it is in “good condition” with sufficient cash reserves. Separately, Malaysia’s Forest City project in which COGARD owns two-thirds, was said to be stuck, having been affected by the pandemic. The project is a $100bn offshore megacity development project and is expected to be fully developed by 2035, it noted. COGARD’s dollar bonds due 2030 are now trading at 45 cents on the dollar.
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