On August 14th, Evergrande Auto announced that it has received a first-time strategic investment of $500 million from NWTN Group, a listed company held by the UAE's sovereign wealth fund. Additionally, 600 million yuan in transitional funds will be received in installments within five working days after the announcement. All the strategic investment will be used for Evergrande Auto's Tianjin factory to ensure the normal production of Hengchi 5 and the successive mass production of Hengchi 6 and 7. Notably, the NWTN Group will also assist Evergrande Auto in expanding into overseas markets, aiming to export 30,000 to 50,000 Hengchi cars to the Middle East market annually.
It's worth mentioning that China Evergrande, Mr. Xu, Evergrande New Energy Vehicle, and the subscribing party have entered into a new energy vehicle share subscription agreement. According to this, Evergrande New Energy Vehicle has conditionally agreed to allot and issue, and the subscriber has conditionally agreed to subscribe for the subscription shares. Upon completion of the debt-to-equity conversion of the new energy vehicle and the subsequent share subscription of the new energy vehicle, the subscriber will hold approximately 27.50% of the enlarged issued share capital of Evergrande New Energy Vehicle. The total price is 3,889,723,903 Hong Kong dollars (equivalent to about $500 million), implying a subscription price of 0.6297 Hong Kong dollars per share.
Assuming the debt-to-equity conversion of the new energy vehicle is completed followed by the new energy vehicle share subscription, the Evergrande Group's equity interest in Evergrande New Energy Vehicle will be diluted to approximately 46.86%. As a result, Evergrande New Energy Vehicle will no longer be a non-wholly owned subsidiary of Evergrande Company, and its financial performance will no longer be consolidated into the results of Evergrande Group.
