China Evergrande’s EV arm drops after creditors seek bankruptcy proceedings for units

Shares of China Evergrande New Energy Vehicle (0708.HK), opens new tab fell 7% in Monday morning trade after individual creditors of two of its units sought court approval for the units to go through bankruptcy proceedings and be reorganised.

The electric car maker said its units Evergrande New Energy Vehicle (Guangdong) and Evergrande Smart Automotive (Guangdong) had received notice from a local court about the July 25 application.

“The above notice has a material impact on the production and operating activities of the company and the relevant subsidiaries,” the company said in a filing to the Hong Kong bourse late on Sunday.

The shares slid to HK$0.295 after initially making early gains.

Shares of China Evergrande New Energy Vehicle have dropped nearly 40% so far this year.

($1 = 7.8068 Hong Kong dollars).