China Evergrande Group’s electric-car unit said there is no guarantee it can meet its financial obligations as it continues to look for strategic investors to inject much-needed capital.
“The group is encountering a serious shortage of funds,” the Hong Kong-listed entity said in an exchange filing late Friday. “In view of the liquidity pressure, the group has suspended paying some of its operating expenses and some suppliers have suspended supplying for projects.”
The statement confirmed an earlier report by Bloomberg News that China Evergrande New Energy Vehicle Group Ltd. had missed salary payments to some of its employees and fallen behind on paying a number of suppliers for factory equipment. Those cash flow difficulties mean the carmaker that had ambitions to take on Elon Musk in the electric-vehicle sector will likely miss its target to start mass deliveries next year.
Evergrande NEV said Friday that it’s negotiating with potential investors about selling some of its elderly care projects and overseas assets in order to “improve the group’s overall efficiency and to supplement working capital.”
The company added, however, that it “remains uncertain as to whether the group will be able to consummate any such sale.”