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Car firm sells stake to local investors

CHERY Automobile Co has raised 2.9 billion yuan (US$424.6 million) by selling a stake to a string of local private equity investors.

The investors include China Huarong Asset Management Corp, Bohai Industrial Investment Fund Management Co and CDH Investments, but the car maker didn't reveal the size of each of the stakes. The Wall Street Journal quoted sources familiar with the situation who said Chery sold a 20 percent stake in total.

Jin Yibo, a spokesman for Wuhu, Anhui Province-based Chery, said the funds will be used in Chery's new-energy project, heavy-truck project and building a car plant.

"The financial crisis is a good opportunity for Chery to develop itself into one of the top 10 car makers in the world," Jin said.

As one of the top Chinese-branded vehicle makers, Chery is trying to break into the top end of overseas markets as competition increases in the mainland.

"Chery will continue to develop its own business with the fund rather than merge with other companies," said Zhang Xin, an analyst at Guotai Junan Securities Co.

Chery aims to boost its total sales by 17 percent to 419,000 units this year - 263,000 sold in China and 156,000 for export.

The car maker also plans to resume its long-awaited stock listing plan as early as this year, if the market recovers.

"Chery needs money from the stock market to fund aggressive expansion. We give top priority to mainland bourses, and we are also encouraged by many investors to go overseas," Jin said in an earlier interview.

Chery delayed listing last year, fearing slumping stock markets would make its shares less attractive to investors.


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