China Evergrande NEV shares rise on $3.2 billion debt reduction plan

Shares of China Evergrande New Energy Vehicle Group (NEV) 0708.HK jumped nearly 50% on Tuesday after the electric car unit of cash-strapped property giant China Evergrande Group 3333.HK unveiled a $3.2 billion strategy to repay debt and remain solvent.

The plan announced late Monday includes a deal to raise about $500 million from Dubai-based mobility firm NWTN NWTN.O in exchange for a 27.5% stake in NEV.

The total package also includes a HK$20.89 billion ($2.67 billion) debt-for-equity swap involving China Evergrande, its founder Hui Ka Yan and his unit Xin Xin (BVI) Ltd, among others, converting loans into shares, NEV said.

China Evergrande’s stake in the unit would be reduced to 46.86% after the transaction is completed.

NEV shares rose as high as 47% before falling back to 16%.