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August 18, 2009

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Home » Business » Auto

Car maker plans group listing

CHINA'S FAW Group Co may seek a group listing through its Shenzhen-listed FAW Car Co and issue new shares worth tens of billions of yuan.

The nation's second-biggest auto group has hired UBS Securities Co as its adviser. Major assets would involve stakes in its ventures with Germany-based Volkswagen and Audi, and Japan-based Toyota Motor Corp and Mazda Motor Corp, the Economic Observer reported yesterday, citing an anonymous company insider.

FAW shelved its group listing plan two years ago due to a poor market environment.

The Beijing-based newspaper also said FAW is considering another listing on the Hong Kong stock exchange.

Shares of FAW Car have risen 15 percent since May to 17.61 yuan (US$2.6) before trading was suspended yesterday.

Phone calls to FAW Car's spokesman went unanswered.

"FAW's huge assets and the sluggish stock market over the past two years prevented an earlier listing," said Li Chunbo, an analyst from CITIC Securities Co. "But the listing can push forward now."

The long-awaited listing plan came at a time when the central government is restructuring major state-owned companies and encouraging them to list core-assets in a plan to create globally competitive firms.

FAW Group is also joining a growing number of Chinese auto makers keen to cash in on a bullish stock market. Chery Automobile, BYD Automobile Co and Guangzhou Automobile Industry Group Co also have plans to go public after the benchmark Shanghai Composite Index has gained 57.7 percent so far this year.

The newspaper cited a company executive as saying that it is the best time for FAW to conduct a group listing as the stock market is recovering and government stimulus measures are breathing new life into the auto industry.

FAW Group owns 22 subsidiaries, including four listed units, and has stakes in another 14 companies.

FAW sold 862,800 vehicles in the first half of this year.


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