The financial difficulties for China’s Evergrande Group with risk of bankruptcy with approximately 355 trillion won in debt have spread to Sweden in northern Europe.
According to Bloomberg on Saturday, National Electric Vehicle Sweden AB (NEVS), a Swedish company that jointly develops electric vehicles with Evergrande Group’s subsidiary, Evergrande New Energy Vehicle Group, recently laid off 300 employees, which is almost half of the entire 670 employees at a factory.
“Due to the lack of funding from the Evergrande New Energy Vehicle Group, we had to reduce jobs and the development of electric vehicles has been suspended,” said a member of NEVS. “We are looking for a new partner and investor,” says Stefan Tilk, CEO of NEVS.
Evergrande New Energy Vehicle Group has been preparing for mass production of electric vehicles next year but has failed to pay a Chinese construction equipment company. Some of its employees have not been paid for long and free meals for researchers at its R & D center have been shut down.
While Evergrande Group sold shares owned by its subsidiary at the end of September to secure 1.83 trillion won but the group’s crisis will continue as it has 750 billion won interests to pay until the end of this year. As its main business, real estate, has declined due to Chinese government regulations and its prominent electric car business is struggling, some say the group will not be able to recover on its own.
Evergrande Group failed to pay 55.9 billion won in dollar bonds to creditors on Wednesday. It also missed the payment of 99.3 billion won of dollar bond yields on September 23 and delayed payment on Thursday.
Ki-Yong Kim [email protected]