No More Free Lunch for Evergrande NEV Staff as Coffers Run Dry

(Bloomberg) -- In another sign of how grim things are getting at China Evergrande Group, its electric-car unit has stopped providing free lunches and other at-work meals to research center staff and asked employees to extend their leave beyond the upcoming October Golden Week holiday, people familiar with the matter said.

China Evergrande New Energy Vehicle Group Ltd.’s research institute on the outskirts of Shanghai told employees that as of Sept. 27, free lunches and dinners are a thing of the past, the people said, asking not to be identified because they’re not authorized to speak publicly. Instead, catering services will be on hand for paid purchases. The company didn’t provide a reason for the decision.

Separately, some staff, including those working at the carmaker’s production sites in Shanghai and Guangzhou, have been asked to take until the end of next month off without pay, extending a holiday that’s meant to wrap up on Oct. 7, the people said.

Representatives for Evergrande NEV didn’t immediately respond to a request for comment.

The lunch and leave requests may seem small but they’re a further indication of the financial turmoil gripping the broader group. Beijing has now stepped in to buy a stake in a struggling regional bank from parent Evergrande Group as it seeks to limit contagion in the financial sector from the embattled property developer.

Evergrande NEV said last week there’s no guarantee it can meet its financial obligations while it looks for strategic investors to inject much-needed capital. In view of the liquidity pressures, it’s suspended paying some operating expenses and fallen behind on paying a number of suppliers for factory equipment.

All that means the company, which once had ambitions to take on Elon Musk’s Tesla Inc. in the electric-vehicle sector, will likely miss its target to start mass deliveries next year.

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With assistance from Bloomberg