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SAIC to set up holding firm ahead of listing
(Shenzhen Daily)
Updated: 2004-11-30 14:43
Shanghai Automotive Industry Corp (SAIC), one of China's leading automakers,
announced over the weekend it planned to establish a shareholding company to
hold its auto assets as it was preparing for an initial public offering (IPO).
Under the plan, part of the assets to be transferred into the new company
would be SAIC's 70 percent stake in its Shanghai-listed arm, Shanghai Automotive
Co, SAIC said in a statement.
Establishing the new company, Shanghai Automotive Group, was an initial step
to raise up to US$2 billion in an IPO in Hong Kong in mid-2005, the company
said.
The company has also been reportedly considering a listing in New York.
It had received approval from the Shanghai municipal government for the
shareholding company, but was still waiting for the nods from the State-owned
Assets Supervision and Administration Commission, SAIC said.
The company has 62,460 employees and had net assets worth 33.1 billion yuan
(US$4 billion) by the end of last year.
It has been a long-time partner with global auto giants including General
Motors Corp of the United States and Germany's Volkswagen AG, which have helped
it carve a large share in the fast-growing Chinese market.
Last month, it acquired a controlling 48.9 percent stake in Ssangyong Motor
Co, South Korea's fourth-largest automaker, for about US$500 million.
SAIC is also in talks with British automaker MG Rover Group Ltd over a
cooperation project, which would involve developing and manufacturing in both
markets.
Many analysts believe its IPO will help fund some of these overseas
projects.
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