China’s local govt bodies ask Evergrande EV unit to return $262.4 million subsidies

By Thomson Reuters May 22, 2024 | 9:19 AM

(Reuters) -China Evergrande New Energy Vehicle said on Wednesday its unit had received a letter from the country’s local administrative bodies demanding repayment of 1.9 billion yuan ($262.42 million) given as subsidies and incentives.

The local bodies sent a letter of demand for Evergrande Automotive Holdings to terminate a series of investment cooperation agreements made between the parties since April 29, 2019, the electric vehicle (EV) unit of China Evergrande said in a statement.

“The above demands of the letter, if ultimately implemented, could have a material adverse impact on the financial position and operations of the Company or each of the relevant subsidiaries.”

Earlier this year, China Evergrande, the world’s most indebted property developer, was ordered to be liquidated after it was unable to offer a concrete restructuring plan. This was more than two years after it defaulted on its offshore debt and followed several court hearings.

The company said its shares will remain suspended until further notice.

($1 = 7.2404 Chinese yuan renminbi)

(Reporting by Poonam Behura in Bengaluru; Editing by Sriraj Kalluvila and Devika Syamnath)