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BYD seeks funds via Shenzhen listing to expand production
By Jin Jing |
July 25, 2009, Saturday
|
Print Edition
Print Edition
AFTER a nearly one-year delay, China's battery and electric car maker BYD Co yesterday said it expected to raise 2.85 billion yuan (US$417 million) through a listing in Shenzhen to finance production expansion.
Specializing in new energy vehicles, BYD, which is backed by United States investor Warren Buffett, plans to issue up to 100 million yuan-denominated shares on the Shenzhen Stock Exchange, according to its statement to the Hong Kong stock exchange yesterday.
The proceeds will be used to increase production of lithium-ion batteries, expansion of new models and auto parts projects as well as for the second phase of a solar battery manufacturing program.
Zhang Xin, an analyst at Guotai Jun'an Securities Co, said that despite the bright future for its core business, there is no guarantee that the planned A-share listing would be hotly pursued by investors and much would depend on the firm's latest financial results.
Other analysts believed a listing in Shenzhen, where BYD is headquartered, will make it easier to gain government support.
BYD said the listing plan still needs approval from shareholders at a meeting scheduled in September. A company official earlier said the listing is expected to be implemented as early as the first half of next year.
Because of higher market demand for new energy vehicles, manufacturers such as BYD have been in need of money to increase production and boost engineering expertise.
Wang Jianjun, a spokesman of BYD, said its investment in electric cars totalled more than 2 billion yuan since 2003 and mass production is expected to start next year.
Earlier this month, BYD confirmed it is seeking to invest at least 2 billion yuan to buy a bus-making company in central China, which will become its third manufacturing base in the country.
German car maker Volkswagen AG has also said it plans to explore cooperation with BYD.
Specializing in new energy vehicles, BYD, which is backed by United States investor Warren Buffett, plans to issue up to 100 million yuan-denominated shares on the Shenzhen Stock Exchange, according to its statement to the Hong Kong stock exchange yesterday.
The proceeds will be used to increase production of lithium-ion batteries, expansion of new models and auto parts projects as well as for the second phase of a solar battery manufacturing program.
Zhang Xin, an analyst at Guotai Jun'an Securities Co, said that despite the bright future for its core business, there is no guarantee that the planned A-share listing would be hotly pursued by investors and much would depend on the firm's latest financial results.
Other analysts believed a listing in Shenzhen, where BYD is headquartered, will make it easier to gain government support.
BYD said the listing plan still needs approval from shareholders at a meeting scheduled in September. A company official earlier said the listing is expected to be implemented as early as the first half of next year.
Because of higher market demand for new energy vehicles, manufacturers such as BYD have been in need of money to increase production and boost engineering expertise.
Wang Jianjun, a spokesman of BYD, said its investment in electric cars totalled more than 2 billion yuan since 2003 and mass production is expected to start next year.
Earlier this month, BYD confirmed it is seeking to invest at least 2 billion yuan to buy a bus-making company in central China, which will become its third manufacturing base in the country.
German car maker Volkswagen AG has also said it plans to explore cooperation with BYD.
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