Bloomberg
Evergrande chooses new tycoons for an EV unit that is worth more than Ford
(Bloomberg) – Chinese billionaire Hui Ka Yan has gone beyond his poker friends to finance the expansion of his indebted empire. The president of the China Evergrande Group has summoned new tycoons with links to their other real estate ventures to raise billions for an electric vehicle startup sector that is now worth more than Ford Motor Co. – all without any mass production of cars. Three of the six strategic investors in the China Evergrande New Energy Vehicle Group Ltd.’s $ 3.4 billion stock offering in January were key investors in a property-services unit that went public two months earlier. Another financier helped finance an attempt to list the parent company in mainland China. Hui also appealed to the wife of longtime supporter Joseph Lau, part of the “Big Two Club” of tycoons who play the poker game of the same name. The new sponsors underscore Hui’s ability to expand his network of wealthy acquaintances to raise money for his empire, while the government represses real estate firms, restricting its loans to prevent a crash. “When liquidity is tight, it is worthwhile to have Hui Ka Yan’s network of wealthy friends,” said Brock Silvers, Hong Kong investment director in the capital Kaiyuan. “Hui’s fundraising methods can raise questions about the true depth of market support for Evergrande’s ventures.” Although lesser known than Hui’s family of supporters, the new donors helped him join the global electric vehicle craze. Evergrande’s EV unit is now a $ 61 billion giant, worth twice as much as Nissan Motor Co., although it has not formally started mass production. Each investor agreed to a 12-month blackout period for subscribed shares, which shows their confidence in the electric vehicle business, Evergrande said in a response to Bloomberg. The profits will be used to build automobile production bases and for research and development, the company added. “This again demonstrates Evergrande’s unbreakable business partnership with his close friends in the industry,” said Maggie Hu, assistant professor of finance and real estate at the Chinese University of Hong Kong. “As the alliance is often strategic and long-term, it substantially reduces the stress on the company’s cash flow.” Here is a summary of the latest supporters of Hui, China’s 14th richest person with a net worth of about $ 23.5 billion, according to the Bloomberg Billionaires Index.1. Chen HuaThe president of the Kingkey Group personally placed 5 billion yuan ($ 770 million) at the start of the EV through a unit, according to a filing. Kingkey was also a key investor in Evergrande’s real estate services IPO in December, buying HK $ 236 million ($ 30 million), according to a term of commitment seen by Bloomberg .hen is a veteran of the real estate industry, transporting cement on construction sites of works in its 20 years. He formed his own company in 1994, completing historic buildings like the 98-story KK100 tower in the high-tech center of Shenzhen. Kingkey made its name in 2002 after inviting former US President Bill Clinton to deliver a speech on one of its residential projects, and later had former UK Prime Ministers John Major and Gordon Brown at events in the United Kingdom. company.2. Wong Kwong MiuWong, who was born in 1969 in southern Guangdong province and now has a Hong Kong passport, founded developer Centralcon Group based in Shenzhen in 1993 and controls Shenzhen Centralcon Investment Holding Co. Centralcon remains small, with contract sales hovering about 15 billion yuan, or about 2% of Evergrande’s. Most of its residential portfolio is in the Greater Bay area that includes Hong Kong. Like Hui, Wong was a member of the Political Advisory Committee, which helps advise the government on policy. Wong personally invested 5 billion yuan in the EV maker through a unit. The controlling shareholder of the developer was one of the main sponsors of Evergrande’s real estate services unit in December, with an investment of HK $ 200 million, filings and timeframes seen by the Bloomberg program. Read more: Musk’s latest challenger is a politically experienced Chinese tycoon3. Liu Ming HuiThe president and founder of China Gas Holdings Ltd., 57, has undergone a rare transformation – from antagonistic businessman to established executive to crime suspect and vice versa. A native of Hebei province, in the north of the country. , Liu was a government official responsible for attracting foreign investment to the area before joining the state-owned energy supplier. After a year in prison for what turned out to be false allegations of embezzlement, Liu returned to China Gas. His inspiration in prison included turning the company’s army of meter readers into door-to-door salespeople, selling everything from insurance to food delivery. Read more: Great new idea from the Chinese executive forged during the arrest TormentLiu personally put 3 billion yuan at the start of the EV. A subsidiary of China Gas, Hai Xia Finance was also a key investor in Evergrande’s services unit in December, the files show. China Gas said in an email response to Bloomberg that it signed a pact with Evergrande in 2020 for “all sides” cooperation, including installing pipelines, supplying natural gas and providing heating services for Evergrande projects. “China Gas believes that working with Evergrande, a leading developer in China, will help its business,” wrote the company’s spokesman. Wang ZhongmingWang leads the Shenzhen Greenwoods Investment Group, with businesses ranging from construction and agriculture to hospitality and finance, according to a document. Greenwoods’ 80 billion yuan in total assets include the mineral water, grain and oil businesses that were sold by Evergrande, its website shows. Greenwoods invested 5 billion yuan in the EV maker. Another company Wang founded, Shenzhen Jiahui Investment Group, controlled two strategic investors in Evergrande’s onshore division known as Hengda Real Estate, the unit that planned to go public in China and later generated startling liquidity when it failed to do so. Shenzhen Huajian Holdings invested 5 billion yuan in Hengda in December 2016 as a first round investor, while Shenzhen Jiancheng Investment added 3.5 billion yuan in May 2017 as a participant in the second round.5. Chan Hoi-wanChan, 41, a former journalist and now CEO of Chinese Estates Holdings Ltd., has long had ties to Hui through her billionaire husband, Joseph Lau. Chan said he makes regular video calls with Hui and other business partners. The Hong Kong developer paid a price for his investments in Evergrande. Chinese Estates said last month that it expects to record an unrealized loss of HK $ 5.8 billion from its stake in Evergrande. Holdings in the Shenzhen-based company, whose shares have fallen 37% in the past two years, account for 41% of the total assets of Chinese properties. That did not stop Chan from being the biggest financier in the pre-listing financing round of Evergrande’s property management arm last year, subscribed to 5% of the shares. Chan also invested HK $ 3 billion in the EV unit. The last bets were better for Chan than Evergrande herself. Shares in the real estate services unit have risen 70% since the IPO in December, while the EV arm has almost doubled since switching to automobiles last August. Kingkey, Centralcon, Chinese Estates and Greenwoods did not respond to requests for comment. For Hui, however, the support of Chan and other tycoons could pave the way for the construction of his first series of cars. “The recent fundraising of equity funds and self-financing by the EV company should be sufficient for its development in 2021 and 2022,” said Raymond Cheng, property analyst at CGS-CIMB Securities. (Updates with more comments in the eighth paragraph.) For more articles like this, visit us at bloomberg.comSubscribe now to stay on top of the most trusted business news source. © 2021 Bloomberg LP