By LIU Zeran
Hengchi, the EV subsidiary of embattled Evergrande, has lost the support of investor NWTN which has withdrawn its conditional financing.
Only in August, Hengchi and NWTN reached an agreement on an investment of US$500 million (3.6 billion yuan) and US$600 million in interest-free financing, to be disbursed in three installments. In return, NWTN was slated to acquire a 27.5 percent stake in the EV brand.
Hengchi has received the initial tranche of US$200 million, however, on September 29, NWTN stated that they would not proceed with further financing until Evergrande’s debt restructuring is complete.
The financial stability of NWTN, founded in China and now headquartered in Dubai, has long been in doubt. The company has incurred losses totaling US million in the past three years. As of 2022, NWTN's liquid assets amounted to US2 million, less than the amount promised to Hengchi. All NWTN equity is already pledged as collateral.
Hengchi, established in 2019, had ambitious plans to become the world's largest auto manufacturer within five years but actually made a net loss of 84 billion yuan in 2021 and 2022.
