By Concerns over Subscription and Loan Conversion Agreement
According to Evergrande Auto, the parties involved in the share subscription and loan conversion agreement, including Nasdaq-listed carmaker NWTN, have not agreed to extend the long stop dates, which expired on December 31, 2023.
Share Price Decline
Following this news, Evergrande Auto shares experienced a significant decline of nearly 18% early Tuesday, reaching a three-month intraday low in terms of percentage decline.
Suspension of Obligations by NWTN
In October, NWTN suspended the performance of relevant obligations under its share subscription, citing uncertainties surrounding Evergrande Auto’s parent company, China Evergrande Group. However, Evergrande Auto expressed its intention to continue talks with NWTN.
Delayed Factory Expansion
NWTN had planned to invest $500 million for a 28% stake in Evergrande Auto, which would have been used by the company to fund the expansion of its factory. The factory expansion has been delayed due to financial issues faced by its parent company.
Negotiations for Amendments
In its filing, Evergrande Auto reaffirmed its commitment to negotiating amendments to certain key terms of the deal with NWTN regarding the share subscription and loan conversion subscription agreement.
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