China Evergrande’s EV arm units to enter bankruptcy, reorganization proceedings

(Reuters) – China Evergrande (HK:) New Energy Vehicle said on Monday a local court had ruled that two of its units should enter into bankruptcy and be reorganised, a week after individual creditors of the units filed for such proceedings.

Shares of the electric vehicle maker plunged 7% on July 29, a day after individual creditors of Evergrande New Energy Vehicle (Guangdong) and Evergrande Smart Automotive (Guangdong) sought court approval for the units to go through bankruptcy proceedings and be reorganised.

The firm said a local court hearing was held on Aug. 2, and the court ordered the units to engter into such proceedings.

The EV unit of embattled real estate developer China Evergrande Group in May updated the market that its liquidators were in talks with a potential buyer to take a stake in the company, thereby increasing chances of extending a new credit line for the firm to support production.