Evergrande Group's Electric Vehicle Subsidiary to Raise 1.2 Trillion KRW in Capital Increase

[Asia Economy Reporter Park Byung-hee] Hengda Auto, the electric vehicle subsidiary of Chinese real estate developer Hengda Group, has conducted a large-scale capital increase.

According to Xinjingbao on the 26th, Hengda Auto recently carried out a capital increase worth $985 million (approximately 1.175 trillion KRW). Despite the ongoing liquidity crisis of its parent company Hengda Group, Hengda Auto is continuing to seek business expansion. Hengda Auto also recently sold 9% of its treasury shares for $347 million, stating that the funds will be invested in new energy vehicle research and production.

Hui Ka Yan, chairman of Hengda Group, announced at an internal meeting on the 22nd that the company will reduce the proportion of its real estate business and focus on the electric vehicle business going forward.

Ryu Yong-ju, president of Hengda Auto, also stated on the 11th of last month that electric vehicles will be shipped from the Tianjin factory starting early next year, with the first model being the Hengchi 5.

Chairman Hui established Hengda Auto in 2019 with a capital of $2 billion (approximately 2.4 trillion KRW) to enter the electric vehicle market.