(Bloomberg) -- China Evergrande New Energy Vehicle Group Ltd. warned its first-half loss will nearly triple from a year earlier due to higher provisions tied to the wind up of its embattled property developer parent.
The electric-vehicle unit of China Evergrande Group expects a net loss of 20.3 billion yuan ($2.85 billion), compared with a loss of 6.87 billion yuan in the first half of 2023, according to a filing on Tuesday, based on a preliminary assessment by management.
The company said it increased provisions to 16.7 billion yuan for impairment losses on receivables from the subsidiaries, associates and joint ventures of China Evergrande. The firm expects to report full results this week.
The EV maker, which initially aimed to take on Tesla Inc. and once had a market value that topped Ford Motor Co., was swept up in a debt crisis that engulfed its parent. Earlier this month, the company said two subsidiaries have started bankruptcy proceedings. In June, the automaker said it was severely short of funds, and faced obligations to creditors and a local government that asked it to return about 1.9 billion yuan in incentives and subsidies.
In May, it said liquidators had reached a preliminary agreement with an unidentified buyer for an initial 29% stake in the unit. However, the deal hasn’t been finalized and there’s been no update in more than two months.
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