Evergrande denies EV unit stake sale talks

China Evergrande Group, a prominent property developer, on Friday denied holding negotiations with Chinese technology company Xiaomi Corp for a 65 percent stake in its electric car unit, Evergrande New Energy Vehicle Group.

Evergrande's denial coincided with a similar response from Xiaomi to media reports that the two sides were in talks for the said stake sale.

The property giant, media reports suggested, was keen to reduce its debts and hence seeking to raise funds by offloading some assets or via subsidiary stake sales.

After reported meetings on Thursday with the People's Bank of China, the central bank, and the China Banking and Insurance Regulatory Commission, Evergrande said on Friday it will strive to ensure stable operations across its group of companies and deal with debt risks, so as not to rock the property and financial markets.

For its part, Xiaomi said it has been in touch with various carmakers but not made any decision on reaching cooperation agreements.

Evergrande, however, admitted on its website it did exchange initial communications with Xiaomi to explore an agreement for bringing the latter onboard as a strategic shareholder, but did not conduct any negotiations for a stake sale.

On Aug 10, listed companies belonging to the Evergrande group announced they were in talks with potential independent investors for stake sales relating to the electric car and property management units as concerns arose over a liquidity crunch.

The PBOC and the CBIRC said in a statement that Evergrande, being an industry major, should implement the country's strategic policy supporting stable and healthy development of the property market.

Evergrande said on its website it will fully comply with the policy and strive toward the healthy development of the property industry.

It also pledged to work diligently on its property projects so as to meet its commitments on both quantity and quality. It promised to make all necessary full disclosures on major issues, in accordance with relevant laws and rules, and would never spread false information and issue clarifications promptly in case of any disinformation.

According to a report on the China Daily website, Evergrande has invested 47.4 billion yuan ($7.3 billion) in its new energy vehicle unit at the end of 2020, including 24.9 billion yuan in research and development. The company unveiled nine new models at this year's Shanghai Auto Show, without a clear timetable for mass production and delivery.

Ma Si in Beijing contributed to this story.