China Evergrande New Energy Vehicle Surges on $3.35 Billion Share Placement Plans
Shares of China Evergrande New Energy Vehicle Group Ltd. surged Monday morning after the company said it has lined up investors for a US$3.35 billion share placement.
The stock gained as much as 40% to HK$42 within a few hours of trading. If the momentum is maintained until market closing, shares would settle at an all-time record.
The electric-car company said Sunday that it has entered into agreements with six investors, including Liu Minghui, the founder, chairman and president of China Gas Holdings Ltd., to buy 952 million newly issued shares at HK$27.30 apiece.
The investors have agreed to hold the shares for a 12-month lockup period, it said.
It will use proceeds from the placement to repay debts and to invest in research and production.
China Evergrande New Energy Vehicle's move represents efforts by its parent, China Evergrande Group, to find new growth drivers amid a slowing real-estate market and financial pressures.
The debt-laden China Evergrande Group is Asia's biggest junk-bond issuer and one of China's biggest developers. It has nearly $3 billion of dollar debt maturing this year, according to FactSet data.
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