By PAN Tao
Shenzhen Hengchi Automobile Trading Co.,Ltd, the car manufacturing spin off of troubled property developer Evergrande Group, is facing a possible takeover from another car manufacturer, people familiar with the matter told Jiemian News Wednesday.
The merger is led by a local government, the source said, and Evergrande is reluctant of letting Hengchi go. On August 6, Hengchi said on its WeChat account that it had secured “over 40,000 pre-sale orders.”
Hengchi has only one plant in Tianjin that is capable of manufacturing cars. Sources said angry Evergrande employees who wanted their salary and savings back stormed the factory last week, paralyzing the assembly line. Meanwhile, due to a lack of material, the factory won’t be able to start production any time soon, the source said.
It has been more than six months since Hengchi announced the completion of its first EV unit, the factory only managed to manufacture some 200 cars.
Last year in August, Evergrande said in a statement that the company was in contact with potential buyers to ease financial pressure, Hengchi was among the asset ready for sale, though nothing material happened.
As much as Evergrande is trying not to lose Hengchi, the more grave problem facing the real estate developer is how to win back the trust of suppliers after the debt crisis.
“Few are willing to work with Evergrande or Hengchi,” the source said. “Every time they talk with Evergrande, they demand full payment ahead.”
