Evergrande Group is in talks with smartphone maker Xiaomi and Shenzhen state-backed investment firms as it looks to sell part of a 65% stake in its electric vehicle unit, three sources said.
The Evergrande New Energy Vehicle Group had a market capitalisation of $12.5 billion on Thursday and one of the sources said the consortium is looking to buy a substantial minority stake.
Evergrande, Xiaomi and Shenzhen state asset regulator did not respond to requests for comment.
The talks were said by source to be of an early stage and subject to changes.
The developer said last week that it was in discussions with several independent third parties on the proposed sale of certain assets, including stakes in Evergrande NEV, as part of its efforts to reduce debt.
Smartphone maker Xiaomi has been ramping up investments in EV suppliers after it unveiled its EV ambition with an investment of $10 billion in March, following its peers from Apple Inc. to Huawei Technologies Co as they bet on more cars becoming battery-powered and smarter
Evergrande has been struggling to raise funds to pay its debts after Beijing stepped up curbs on the real estate sector to contain risks of a bubble.
China's central bank, banking and insurance regulator said they had summoned executives of China Evergrande GroupEvergrande Group to a meeting on Thursday.
Investors have been concerned about Evergrande's financial health https: www.reuters.comworld china debt-constrained - Evergrande-says - sale-talks - certain assets - stocks jump 2021 -- 08-11 and the potential systemic financial risk it poses.
Concerns about Evergrande intensified after it failed in June https: www.reuters.com world asia-pacific sp-global - downgrades-china - evergrande subsidiaries - 2021 - 08 - 06 to pay some commercial paper on time. A Chinese court froze a $20 million bank deposit held by the firm on the request of China Guangfa Bank last month.