BEIJING/HONG KONG: China Evergrande New Energy Vehicle Group (NEV) shares jumped nearly 50% on Tuesday after the electric vehicle unit of cash-strapped property firm China Evergrande Group announced a $3.2 billion plan to repay debt and stay afloat.
The plan unveiled late on Monday includes a deal to raise nearly $500 million from Dubai-based mobility firm NWTN , which will own about a 27.5% stake in NEV in return.
The overall package also includes a debt-for-equity swap of HK$20.89 billion ($2.67 billion) involving China Evergrande, its founder Hui Ka Yan, and his unit Xin Xin (BVI) Ltd, among others converting loans to shares, NEV said.
After the deal is completed, China Evergrande's stake in the unit will be diluted to 46.86%.
Shares in NEV jumped as much as 47% before paring down its gain to 16%. ($1 = 7.8216 Hong Kong dollars) (Reporting by Roxanne Liu in Beijing and Clare Jim in Hong Kong; Editing by Miyoung Kim and Jamie Freed)