Shanghai (ZXZC)- Evergrande Health, a unit of China Evergrande Group, has agreed a further investment amounting of around $3 billion in its subsidiary NEVS, a Sweden-based intelligent EV manufacturer, as the company believes it will help NEVS's business growth.

（Photo source: Evergrande Health)

Before talking about the latest transaction, it is necessary to review the history about how Evergrande Health controlled NEVS. On January 15, 2019, the company said its wholly-owned subsidiary had agreed to acquire the entire share capital of Mini Minor Limited, whose only asset was 51% shareholding in NEVS, for a total consideration of US$930,000,000. Thus, Evergrande Health became a main shareholder of NEVS from then on.

A further investment has been approved only ten months later. On November 10, Evergrande Health announced that Mini Minor had agreed to subscribe for the NEVS New Shares (representing roughly 42.19% of the enlarged issued share capital of NEVS) at a total subscription price of around HK$438,758,007 (US$56.055 million). Additionally, Mini Minor will make a payment in cash or in assets to NEVS in a total amount of US$2,852,843,395.14 by several installments.

According to the announcement, Mini Minor has also agreed to purchase the NEVS Sales Shares (representing around 0.89% of the enlarged issued share capital of NEVS) from National Modern at a total consideration of US$91,196,382.24.

Hence, the capital to be injected into NEVS aggregates nearly $3 billion. Upon completions of the above transactions, NEVS will be held as to 82.4% by Mini Minor from the previous 68%.

Evergrande Health said it believes that the newly-agreed investment will further replenish the general working capital of NEVS and its subsidiaries for their R&D and production, facilitating the business growth of NEVS.

The company also revealed that the R&D work for electric vehicles has been conducted by the wholly-owned subsidiary of NEVS under “Hengchi”, Evergrande Group's self-owned auto brand.