The electric vehicle (EV) unit of China Evergrande Group, the world’s most indebted developer, has granted share options worth HK$1.26 billion (US$162 million) to directors and employees in a bid to “promote and support” the company’s development, according to a filing on Tuesday.
A total of 323.72 million share options were granted to three independent non-executive directors and around 3,180 employees of China Evergrande New Energy Vehicle. The share options will be exercisable in four tranches starting from March 20 next year at HK$3.90 per share. That puts it at a premium of around 34 per cent to the closing price of HK$2.90 on Monday. The company’s shares have fallen by around 90 per cent year to date.
The three independent non-executive directors – Chau Shing-yim, Guo Jianwen and Xie Wu – were each given 300,000 share options. Chau is the chairman of the audit committee of the EV maker and its parent, while Guo and Xie are involved in the traditional Chinese medicine industry in the mainland.
The remaining 322.82 million share options were given to the staff, including scientific research personnel.
A fleet of 53 cars, comprising the Hengchi 1,3,5,6 and 7 models, recently completed a 70-day road test covering 500,000km in China. Photo: Handout
These share options “will help the group continuously promote and support the development of the company, ensure the interests of the group as a whole and its long-term development stability, enhance the corporate value of the company and achieve its long-term objectives,” China Evergrande New Energy Vehicle said.
The move to grant share options at this point of time can encourage and give employees confidence and a sense of stability without involving any cash flow from the company’s standpoint, said Stanley Chan, director of research at Emperor Securities.
While little clarity was provided by the company about the employees who received the share options, Chan said they were likely to be engineers and salespersons involved with the development of the company’s Hengchi-branded cars.
A fleet of 53 cars, comprising the Hengchi 1,3,5,6 and 7 models, recently completed a 70-day road test covering 500,000km. The tests were carried out in Turpan in China’s northwestern Xinjiang province and Qinghai in the southern island province of Hainan, according to a post on the company’s official WeChat account.
“Everyone is looking at Hengchi vehicles, which need to be rolled out as soon as possible to stabilise market confidence,” said Chan.
“In the event that they need to sell the company, at least the market valuation will be higher [with its launch],” he added, alluding to parent Evergrande’s US$300 billion of liabilities.
In a letter to employees on the occasion of the Mid Autumn Festival reported by mainland media on Tuesday, Evergrande chairman Hui Ka-yan said he firmly believed the group will be able to walk out of its darkest moment, and fulfil its responsibility to homebuyers, investors and financial institutions.Internet Explorer Channel Network