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2021-09-27 HKT 16:53
Shares in debt-laden Evergrande's e-vehicle unit slumped by more than 10 percent Monday after the firm scrapped a proposed Shanghai listing, and with the property developer mired in a liquidity crisis.
Evergrande is struggling with more than US$300 billion of debt from a years-long acquisition binge, including into electric vehicles once billed as a rival to Elon Musk's dominant Tesla brand.
There are fears any defaults on tens of millions of dollars of interest payments could spark a chaotic implosion of the firm, China's second-largest developer, with major repercussions for the domestic economy and the rest of the world.
Shares in Evergrande New Energy Vehicle, also known as Evergrande Auto, fell to HK$1.95 in early trading in Hong Kong Monday, after it scrapped the planned Shanghai listing via a Sunday stock exchange filing.
In a separate exchange filing late Friday, Evergrande NEV said its parent company's cash crisis would have a "material adverse impact" on production.
The firm warned of a "serious shortage of funds" which forced it to suspend "paying some of its operating expenses and some suppliers".
It admitted "there is no guarantee that the Group will be able to meet its financial obligations under the relevant contracts", as it looks for strategic investors.
The car unit's share price has lost 80 per cent of its value since February this year. (AFP)