Evergrande Buys a Controlling Stake of NEVS, the Company that Purchased the Assets of Saab
【Summary】Evergrande Health Industry Group, the Hong Kong-based real estate investment company which owned a majority stake in troubled electric vehicle startup Faraday Future, has purchased a majority stake in National Electric Vehicle Sweden (NEVS). NEVS is the company that purchased the assets of defunct Swedish automaker Saab in 2012.
Evergrande Health Industry Group, the Hong Kong-based real estate investment company which owned a majority stake in troubled electric vehicle startup Faraday Future, has purchased a majority stake in National Electric Vehicle Sweden (NEVS). NEVS is the company that purchased the assets of defunct Swedish automaker Saab in 2012.
According to a statement to the Hong Kong stock exchange, Evergrande is paying US$930 million for 51 percent majority stake of NEVS. The South China Morning Post reported that Evergrande Health has already paid first installment of US$430 million on Tuesday, while the remainder of the transaction is expected to be completed by the end of this month.
Evergrande one of the world's most valuable real estate holding companies.The move to acquire a stake in NEVS extends Evergrande's foothold into the automotive industry.
NEVS is part of a Chinese consortium backed by investments from Tianjin's municipal government and a Beijing-based research firm linked to a government think tank. NEVS set up a China venture in 2015, qualifying for electric vehicle production in 2017.
Evergrande's Separate Deal with Faraday Future
In 2017, Evergrande agreed to invest $2 billion over three years though its Evergrande Health division into electric vehicle startup Faraday Future. Faraday is led by Chinese entrepreneur Jia "YT" Yueting.
In Dec 2017, Evergrande gave Faraday a 1.2 billion installment of a $2 billion lifeline to keep the struggling automaker afloat. However, by August 2018 there was a fallout between Evergrande and Faraday.
Evergrande accused the automaker of fiscal mismanagement and failure to hit production milestones and refused to release the remaining $800 million. The rift forced Faraday to furlough its workers and suspend production of the company's first electric vehicle the FF91.
The case was then sent to arbitration in a Hong Kong court.
The two parties eventually reached a settlement last month and Evergrande agreed to restructured its investment pledge, giving up its claim to most of Faraday's car-related assets. Under the terms, Evergrande Health now holds a 32% stake in Faraday Future without any further investment commitments.
Saab was owned by U.S. automaker General Motors for a decade, but the automaker sold off the division in 2009 after declaring bankruptcy during the global recession.
NEVS tried to buy control of Saab in 2012 with plans to turn Saab into a new all-electric brand.
The initial purchase would have licensed NEVS to use the Saab name and logo on vehicles built in China. However, NEVS lost its license to manufacture autos under the Saab name (which the namesake Swedish aerospace company Saab AB still owns) in the summer of 2014.
NEVS set up a China venture in 2015 called Guoneng New Energy, qualifying for electric vehicle production in 2017. Guoneng New Energy, said in December that it delivered its first batch of 500 vehicles to government customers and car-hailing companies. The company expects to start sales to individual consumers in March.
The company still produces a car based on the Saab 9-3, however it's been rebadged as a NEVS model.
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