Evergrande Auto to Record Huge Losses and Updates on Acquisitions
TapTechNews August 27th news, Evergrande Auto just released the latest announcement, expecting to record a comprehensive net loss of approximately 20.254 billion yuan for the six months ending June 30, 2024, while it recorded a net loss of about 6.873 billion yuan in the same period of 2023, with a year-on-year increase in loss of 194.69%.
Evergrande Auto said that the increase in losses was mainly due to the fact that China Evergrande Group has been wound up by the High Court of Hong Kong, and the company has increased the impairment provision for the receivables from the subsidiaries and affiliated companies of China Evergrande Group, and made a full provision of approximately 16.737 billion yuan in the first half of 2024.
In addition, Evergrande Auto also released an announcement regarding the acquisition, stating that the discussions among the potential seller, the potential buyer and the company are still ongoing, but the potential seller and the potential buyer have not yet entered into a purchase and sale agreement, and the potential buyer and the company have not yet entered into a credit agreement.
According to TapTechNews' previous report, on May 26th, Evergrande Auto disclosed an announcement of a potential share sale plan and applied to the Stock Exchange for resumption of trading on May 27th. The announcement at that time showed that the company's joint and individual liquidators on behalf of China Evergrande Group (in liquidation), Evergrande Health Industry Group Limited, AcelinGlobalLimited (collectively, the potential sellers) entered into a term sheet with a third-party buyer (the potential buyer) who, to the best of the knowledge, information and belief of the directors of the company after making all reasonable inquiries, is independent of the company and its related parties, whereby the potential sellers and the potential buyer may enter into a final purchase and sale agreement regarding the sale of the shares of the company held by the potential sellers.
Evergrande Auto's 2023 financial report data disclosed on March 27th showed that as of December 31, 2023, Evergrande Auto's cumulative loss has reached 110.841 billion yuan, of which the loss in 2023 was about 12 billion yuan. As of the end of 2023, Evergrande Auto's total assets were 34.851 billion yuan, and its total liabilities were 72.543 billion yuan, including 26.484 billion yuan in borrowings; in the same period, Evergrande Auto's cash and cash equivalents were 129 million yuan, which was far from enough to cover the borrowings.
