Evergrande to Buy Majority Stake in Swedish Electric-Car Maker NEVS for $930 Million
15 January 2019 - 10:09PM
Dow Jones News
By Kenan Machado
HONG KONG--China Evergrande Group Tuesday said it will buy a
majority stake in the Chinese company that bought Swedish car maker
Saab out of bankruptcy, making a $930 million bet on the expected
surge in demand for electric vehicles in the world's second-largest
economy.
The Chinese property developer, through majority-owned
Evergrande Health Industry Group Ltd., will buy a 51% stake in
National Electric Vehicle Sweden AB (NEVS), which in 2012 bought
the assets and intellectual property rights of Saab Automobile
AB.
China Evergrande also said it agreed to provide a three-year
$1.1 billion unsecured loan to Evergrande Health.
NEVS has 500 staff members at its electric-vehicle research and
development center in Sweden, with production bases in Trollhättan,
Sweden and Tianjin, China, and plans another production base in
Shanghai, the company said. NEVS also has two electric vehicle
models that have reached production standards, Evergrande said.
The acquisition helps Evergrande capitalize on China's move
toward electric vehicles as the country tries to improve air
quality and reduce reliance on fossil fuels. Effective Jan. 10,
China barred new companies from making only conventional vehicles,
including hybrids that partly rely on gasoline-powered engines.
The deal may also help Evergrande move past its faltering $2
billion bet made on Faraday Future, the Chinese electric-car
startup founded by maverick Chinese billionaire Jia Yueting, which
promised to compete with Tesla Inc. After being caught up in
litigation, Evergrande Health promised in December to pony up $1.2
billion by 2020 in addition to the $800 million already paid.
NEVS itself hasn't had much luck since taking over Saab's
assets. In August of 2014, it lost its right to use the Swedish
brand's name as it sought bankruptcy protection. Its losses at the
end of 2017 stood at 996.26 million Swedish krona ($111.3 million),
Evergrande said in its filing to the Hong Kong exchange.
-Write to Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
January 15, 2019 05:54 ET (10:54 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
China Evergrande (CE) (USOTC:EGRNF)
Historical Stock Chart
From Oct 2024 to Nov 2024
China Evergrande (CE) (USOTC:EGRNF)
Historical Stock Chart
From Nov 2023 to Nov 2024
