(Reuters) – China Evergrande New Energy Vehicle Company said on Wednesday that its unit had received a letter from the country’s local governments demanding the return of 1.9 billion yuan ($262.42 million) provided as subsidies and incentives.
Local authorities have sent a letter to Evergrande Automotive Holdings demanding the termination of a series of investment cooperation agreements concluded between the parties since April 29, 2019, the electric vehicle (EV) division of China’s Evergrande (HK:) said in a statement.
“The foregoing letter requirements, if ultimately implemented, could have a material adverse effect on the financial condition and operations of the Company or each of its respective subsidiaries.”
Earlier this year, China Evergrande, the world’s largest and most indebted property developer, was given a liquidation order after failing to come up with a concrete restructuring plan. It comes more than two years after the company defaulted on its offshore debt and followed several court hearings.
The company said its shares will be suspended until further notice.
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