Evergrande’s Main Onshore Unit Discloses $44B in Unpaid Debts as EV Share Deal Fails

The primary mainland unit of China Evergrande has reported more than RMB 316 billion ($44.3 billion) in unpaid due debts, as 2023 drew to a close without completion of a restructuring deal for the world’s most leveraged developer.

The unit, Hengda Real Estate, also disclosed RMB 205.5 billion in overdue commercial bills and 2,053 pending litigation cases involving a total amount of RMB 490 billion, according to a filing with the Hong Kong stock exchange.

The figures are current up to the end of November, a month that saw 101 new enforcement cases against Hengda involving a total amount of RMB 13 billion, plus 54 new cases in which equity interests in subsidiaries and investee companies held by Hengda were frozen.

In addition, Hengda had completed the disposal of 80 real estate projects as of the end of November, Evergrande said in the filing.

Wheels Come Off

The group chaired by Xu Jiayin also issued an update Monday confirming that a deal which would see Dubai-headquartered NWTN (pronounced “Newton”) subscribe to shares of electric car division Evergrande NEV had lapsed at the end of 2023.

The parties to the share subscription and loan conversion deals with NWTN, led by Chinese businessman Alan Wu, failed to reach an agreement to extend the long stop dates, which expired on 31 December.

Last August, China Evergrande announced plans to sell a 27.5 percent stake in Evergrande NEV to NASDAQ-listed NWTN for $500 million. Under the terms of the agreement, the UAE-based car maker would have gained the right to nominate a majority of Evergrande NEV’s board of directors.

The transaction was expected to close in the fourth quarter, contingent on the progress of the parent company’s ongoing debt restructuring and the confirmation of a debt repayment plan by “a certain creditor” of Evergrande NEV, as well as regulatory and shareholder approvals.

Evergrande NEV chairman Shawn Siu said in Monday’s filing that the parties to the share subscription and loan conversion deals would continue to negotiate over “certain key terms” of the agreements.

New Year, Old Headaches

China Evergrande in November introduced a debt restructuring plan for offshore bondholders with an offer to swap their debts into a 30 percent equity stake in each of Evergrande NEV and Evergrande Property Services, Reuters reported at the time.

The proposal ran aground when a group of offshore creditors demanded controlling equity stakes in Evergrande and the two Hong Kong-listed units, according to a Bloomberg account.

Now Evergrande’s most immediate concern is a winding-up hearing set for 29 January after a Hong Kong judge unexpectedly gave the debt-laden developer a December reprieve.