Evergrande unexpectedly increased the capital of its subsidiary

Evergrande unexpectedly increased the capital of its subsidiary

FineAuto

Now the registered capital of Evergrande Auto has grown by as much as 900 percent. Some associate such a move with the future sale of the company.

The Chinese construction corporation Evergrande Group unexpectedly increased the registered capital of its automotive division by as much as 900 percent. According to cnevpost.com, the amount is now 1 billion yuan, up from the original 100 million.

Interestingly, back in early August, Evergrande Auto said it had a net loss of 4.8 billion yuan in the first half of the year. Last year, for a similar period, the loss amounted to 2.45 billion. This was explained by the fact that the automotive business was in its infancy, the company continued to purchase the necessary equipment and invest in development and research.

Nevertheless, an unexpected collapse of the shares of the parent Evergrande Group soon followed, which put all the structures of the concern on the brink of survival. Moreover, the main construction business was also under the threat of bankruptcy. The situation turned out to be so critical that at first the company tried to attract investment in Evergrande Auto, and soon it even sold it. One way or another, apparently, there were no interested in buying the newly formed Hengchi brand. An unexpected increase in the authorized capital, in theory, could make this asset more attractive to potential buyers.

Let us remind you that some earlier information appeared that Evergrande stopped paying salaries to its employees. Complaints also started from the main suppliers of the company. Apparently, Evergrande will not be able to service its debts either.

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