China Evergrande raises HK$10.6b by selling shares in new energy vehicle unit

China Evergrande Group raised about HK$10.6 billion (US$1.4 billion) selling shares in its electric vehicle unit, the latest effort by the nation’s most indebted developer to boost capital,Bloomberg reports.

The sale amounts to about 2.7 percent of outstanding shares in China Evergrande New Energy Vehicle Group, the real estate firm said in a filing to the Hong Kong stock exchange on Thursday. Evergrande NEV tumbled as the shares were sold at a 20 percent discount.

Evergrande has been selling assets to repair its balance sheet in line with Chinese regulators’ efforts to deleverage the property sector. The company was in breach of all key metrics for reducing debt levels – known as the “three red lines” – at the end of last year, even as many of its peers improved.

The company is selling 260 million Evergrande NEV shares at HK$40.92 apiece, according to the filing. That compares with the HK$51.15 close on Wednesday. Evergrande plans to use the proceeds for general working capital, it said.

Shares of Evergrande NEV dropped by  15 percent in Hong Kong on Thursday, and traded 7.8 percent lower at 12:29 p.m. local time. Evergrande slipped by about 1 percent.