News digest

GM sales surge in China

General Motors Corp's sales in China, its second largest market, surged 50 percent in April from a year earlier to a monthly record, boosted by rising demand for its Buick and Wuling models.

GM, which faces the threat of bankruptcy if it cannot complete a reorganization by a US government-imposed June 1 deadline, said that its April China sales including domestic joint ventures totaled 151,084 vehicles.

That followed a rise of 24.6 percent in March to 137,004 vehicles, also a monthly record.

China's automobile market, which overtook the United States as the world's largest in January, has been a leading bright spot in the struggling global motor car industry as government incentives spurred a pick-up in demand.

Finance house sells shares

Morgan Stanley is selling around $110 million of shares in China High Speed Transmission, China's largest wind power transmission gear maker, according to a term sheet obtained by Reuters.

It involves the disposal of 65 million shares in the range of HK$13.03-HK$13.30 per share, according to the term sheet.

China High Speed vies with Belgium-based Hansen Transmissions International and the business Siemens inherited when it bought Flender.

Business clients of China High Speed include General Electric and Japan's Mitsubishi Heavy Industries Ltd.

Refinery below capacity

CNOOC's first major refinery in southern China will run at 70 percent capacity in May, in line with earlier forecasts. The refiner is working to obtain permits to export fuel before any big boost in operations, an industry official said.

The 70 percent ratio at the 240,000 barrel-per-day Huizhou refinery, which was started in mid-March, compared with an average of more than 85 percent at major plants under refining giants Sinopec Corp and PetroChina, signaling still slow Chinese fuel demand.

CEO joins rivals

OZ Minerals Ltd, the world's second biggest zinc mining company, said CEO Andrew Michelmore will join China Minmetals Group as part of the Chinese company's purchase of most of its assets.

Melbourne-based OZ Minerals is searching for a managing director to replace Michelmore, the company said in a statement. Five other members of the board including chairman Barry Cusack will also resign, it said.

OZ Minerals is seeking to complete the sale of $1.2 billion of assets to China's biggest metals trader by mid-June following a shareholder vote, it said earlier. Michelmore, 56, agreed to sell almost all OZ Minerals' assets to Minmetals after a rout in commodity prices following the company's creation last year.

China Eastern sells planes

Loss-making China Eastern Airlines Corp said it would sell two aircraft and lease them back to improve cash flows.

China Eastern has signed sales and leasing contracts with Bank of Communications Finance Leasing Co Ltd for two Airbus A340 jets, the carrier said in a statement to the Shanghai Stock Exchange.

China Eastern will sell the two planes around their combined book value of about 590 million yuan ($86 million), and will pay about 17 million yuan each quarter to lease them back over the next five years.

China Eastern said last month that it may consider scrapping its previous order for nine Boeing 787 Dreamliners if the international travel market remains sluggish.

Shippers buy more vessels

China Shipping (Group) Co, the nation's second biggest sea-cargo company, plans to order dry-bulk ships this year as prices fall on overcapacity concerns and the global recession.

"We'll never give up on new investments," vice-chairman Zhang Guofa said in an interview in Shanghai. He declined to say how many vessels the company would add.

China Shipping intends to order vessels as prices have fallen following an 81 percent drop in bulk-shipping rates in the last 12 months caused by China's waning demand for imports of iron ore and other commodities. The company has avoided the worst of the collapse in rates because of its dominance on domestic routes.

Dairy expansion move

Bright Dairy & Food Co, China's third biggest milk producer, is in talks to buy smaller dairy companies, Shanghai Daily reported, citing president Guo Benheng.

Acquisitions would help boost Bright Dairy's sales, the newspaper said, without identifying any takeover targets.

The dairy company expects sales of 8.2 billion yuan ($1.2 billion) this year and a profit of 162 million yuan, according to the report. The newspaper didn't say whether the forecast was for pretax profit or net income.

The company made a net loss of 285.9 million yuan last year on sales of 7.4 billion yuan, according to its annual report.

(China Daily 05/11/2009 page9)