(Yicai Global) Nov. 29 -- Shares in China Evergrande New Energy Vehicle Group crashed by as much as 18.6 percent today after the electric car arm of cash-strapped real estate giant Evergrande Group said the Chinese government has kept hold of the refund it was due after the firm returned the land use rights to a big industrial plot it had failed to develop.

Evergrande NEV’s share price [HKG:0708] was trading down 16.91 percent at HKD3.93 (USD0.50) at 3 p.m. China time. Earlier in the day it had slumped to HKD3.85.

The 2.67 square kilometer plot of land was intended for a big industrial project and supporting residential facilities worth CNY1.28 billion (USD200 million), Evergrande NEV said on Nov. 26. While it is unknown how much was withheld, the value of the land rights would have been a proportion of this. Any leftover funds from the disbanding of the project will go towards paying workers’ salaries, it added.

The EV maker, which has yet to sell a single car, is desperately trying to raise money to achieve mass production. The huge investment needed to make electric cars has driven the firm heavily into the red and its parent company, engulfed in its own financial crisis with debts of around CNY2 trillion (USD313.3 billion), is no longer able to assist. Evergrande NEV’s deficit nearly doubled in the first half from the same period last year to CNY4.8 billion (USD746 million) on revenue of just CNY37 million (USD5.7 million).

Earlier this month, the company managed to raise HKD3.2 billion (USD410.3 million) in two separate private placements of shares.

It has also been offloading assets. The Guangzhou-based frim has recently sold its stake in the UK’s in-wheel motor tech startup Protean Electric Holdings, which it bought for USD58 million in May 2019, for an unknown sum. And it has sold its Dutch machinery firm E-Traction Europe for a fraction of the sum it paid, receiving just EUR2 million (USD2.2 million) when it paid CNY500 million (USD78 million) in 2019. Evergrande NEV will no longer be liable to loan EUR21 million to Apeldoorn-based E-Traction as part of the deal, it said.

Editor: Kim Taylor