Creditor files for liquidation of Evergrande NEV’s unit

HONG KONG (Reuters) – A creditor filed a petition for the bankruptcy of a unit of China Evergrande (HK:) New Energy Vehicle Group, a subsidiary of China Evergrande Group, in a Shanghai court, the third such petition against the embattled car company.

Trading in NEV shares was suspended at 0152 GMT on Thursday, after the price dropped 5.4%.

A new bankruptcy proceeding could add pressure on the liquidators of China Evergrande Group, the world’s most indebted property developer, to recover debt for creditors and a potential investor in the electric vehicle company.

Zhejiang Chint Electrics filed a bankruptcy and liquidation petition against manufacturing unit Evergrande Hengchi New Energy Vehicle (Shanghai) Co in relation to an overdue and unpaid debt, according to a filing dated Sept. 4 by the No.3 Intermediate People’s Court of Shanghai.

The court said it will hold a hearing on Sept. 18 to decide to accept the petition or not to start a bankruptcy proceeding.

Last month, a Guangzhou court ordered two other units – Evergrande New Energy Vehicle (Guangdong) and Evergrande Smart Automotive (Guangdong) – to enter into bankruptcy and reorganisation proceedings, a move that the EV parent warned would have “a material impact” on its production and operating activities.

Evergrande NEV last week announced a net loss of 20.3 billion yuan ($2.9 billion) in the first half, widening from a 6.9 billion net loss a year ago.

Its total liabilities rose 2.5% from end-December to 74.4 billion yuan, while total assets decreased 53% to 16.4 billion yuan and total cash plunged 69% to 39 million yuan.

The company’s auditor said the material uncertainties from the financial results may have significant impact on the group’s ability to continue as a going concern.

($1 = 7.0999 renminbi)