Shanghai Automotive
Industry Corp (SAIC), China's biggest passenger bus maker, officially
launched a shareholding company to pave the way for its overseas
listings yesterday.
The shareholding company, named Shanghai Automotive
Group Company Limited, has a registered capital of 25.7 billion
yuan (US$3.1 billion), said Zhu Xiangju, a spokeswoman for SAIC.
Its net assets amount to 39.6 billion yuan (US$4.8
billion).
The State-run SAIC's assets in its Shanghai-listed
affiliate Shanghai Automotive Co Ltd, and its two car joint ventures
with General Motors (GM) and Volkswagen, have been put into the
new company.
Chen Hong, former president of SAIC's venture with
GM in Shanghai, will take the helm of Shanghai Automotive Group
Co Ltd.
It is reported that the new company plans to launch
initial public offerings in Hong Kong and New York during the
first half of next year to raise up to US$6 billion.
Zhu, however, declined to confirm the report.
"Overseas listings are badly needed for SAIC
to raise massive capital to achieve its bold expansion at home
and abroad," said Zhang Xin, an analyst with Guotai &
Jun'an Securities Co Ltd.
In October, SAIC clinched a deal to buy a 48.9 per
cent stake in South Korean automaker Ssangyong Motors with US$500
million.
SAIC is in talks with British car maker MG Rover
to pay up to 1 billion pounds (US$1.9 billion) to acquire the
company.
SAIC and GM plan to invest more than US$3 billion
to more than double their joint ventures' annual production capacity
to 1.3 million cars and introduce new models by 2007.
Its joint venture with Volkswagen also plans to increase
annual production capacity to 1 million units by 2008.
SAIC, crowned as one of the world's top 500 multinationals
this year, aims to increase its annual output to 4 million vehicles
and become one of the world's six biggest automakers by 2020.
Its sales this year will exceed 800,000 vehicles,
up from 782,000 units last year.
SAIC reported US$11.72 billion and US$1 billion in
revenues and profits respectively last year.
Many other main Chinese automakers are also seeking
overseas listings, such as Dongfeng Motor Corp, Chang'an Motor
Corp and Beijing Automotive Investment Corp.
Shanghai Automotive Co Ltd closed at 4.92 yuan (US$0.59)
per share yesterday, down 1.99 per cent.
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