(Yicai) Aug. 15 -- Shares in Evergrande NEV rocketed as much as 47 percent today after the new energy vehicle arm of struggling real estate giant China Evergrande Group said it has secured new funding from a United Arab Emirates green mobility solution provider that will help the loss-making firm start producing electric cars again.

Evergrande NEV’s share price [HKG:0708] was trading up 14.7 percent at HKD1.95 (USD0.25) as of 1 p.m. China time today. Earlier in the day it hit HKD2.50.

NWTN, which is backed by the Abu Dhabi Investment Authority, will pay USD500 million for 27.5 percent of Evergrande NEV’s total share capital and the right to nominate a majority of representatives onto the carmaker’s board, the Dubai-based firm said.

A subsidiary of NWTN has also agreed to extend CNY600 million (USD82.4 million) of guaranteed interest-free loans in three tranches to Evergrande NEV for the research and development, production and sales of automobiles.

The funds will be transferred within five working days after the announcement and will be used used to restore production at Evergrande NEV’s Tianjin plant.

This will be a huge boon to Evergrande NEV, which has only delivered 900 of its Hengchi 5 EVs so far, and was forced to halt production in April when it ran out of funds. It still has two models, the Hengchi 6 and 7, that have yet to start mass production.

The investment paves the way for NWTN to hold a majority stake in the carmaker and to become the largest shareholder of the concerted action group. Evergrande NEV still needs to repay its parent firm HKD13.8 billion (USD1.8 billion) in loans and HKD2.3 billion (USD300 million) in interest. It has also borrowed HKD2.6 billion from two other investors that will be converted into company shares.

Once these transactions are complete, Shenzhen-based Evergrande’s stake will be diluted to 21.7 percent and NWTN will become the controlling shareholder.

NWTN was originally an electric car firm called Iconiq that was set up in Tianjin by entrepreneur Wu Nan. The firm, in which Wu still holds 77 percent voting rights, has a vehicle assembly plant in Abu Dhabi and an auto parts factory in Jinhua, eastern Zhejiang province.

NWTN will help Evergrande NEV expand its footprint overseas and to sell between 30,000 to 50,000 autos a year in the Middle East, Evergrande NEV said.

The tie-up will create great synergy between the companies as well as boost the R&D and mass production of new car models, said NWTN.

NWTN was listed on the Nasdaq through a merger with a special purpose acquisition company in November 2022, making it the sole electric vehicle maker from the UAE to list in the US. Before this, NWTN bagged USD200 million in a private placement from Abu Dhabi’s Al Ataa Investment.

NWTN has not generated any revenue in the last three years and held USD210 million in cash as of the end of last year, annual reports show.

Evergrande Auto racked up combined losses of CNY84 billion (USD11.5 billion) in 2021 and 2022, and owed CNY183.8 billion (USD25.3 billion) as of the end of last year.

Editor: Kim Taylor