Guangzhou Auto plans to list
By Alison Leung |
March 24, 2011, Thursday
|
Print Edition
Print Edition
GUANGZHOU Automobile Group Co, China's No. 6 domestic auto maker, plans to seek a listing on the Shanghai Stock Exchange through a 5.23 billion yuan (US$766 million) merger with GAC Changfeng Motor Co.
Guangzhou Auto, which has been expanding through mergers and acquisitions in recent years, has said it forecast 2011 net profit will not be less than 4.96 billion yuan compared with 4.3 billion yuan profit in 2010.
No money will be raised through the new A-share issue but a listing on the domestic market will help promote Guangzhou Auto's brand in China, the world's biggest and fastest growing major auto market, analysts said.
Guangzhou Auto, which holds 29 percent of GAC Changfeng, proposed to swap 1.6 new yuan-denominated A shares or pay 12.65 yuan in cash for each existing Changfeng share it does not own, the company said in a statement late on Tuesday to the Hong Kong stock exchange.
Its partner Japan's Mitsubishi Motors Corp had decided to accept the cash offer and will receive a total of 961.4 million yuan for its 14.59 percent in Shanghai-listed Changfeng.
Guangzhou Auto will therefore issue not more than 470.11 million new A shares at 9.09 yuan each, representing 7.1 percent of the enlarged company's issued share capital, to implement the proposed merger.
If all other GAC Changfeng shareholders choose to exchange their interests in Changfeng for Guangzhou Auto's new A shares, the deal would be worth about 5.23 billion yuan, based on Reuters calculation.
The share exchange ratio represented a premium of 15 percent over the average trading price per Changfeng share of 12.65 yuan of the last 20 trading days. The stock was last traded at 14.07 yuan in October 2010 before being suspended, pending the merger statement.
The merger and A-share listing were subject to regulatory and shareholders' approval, it said.
In November, Guangzhou Auto and Mitsubishi signed a memorandum of understanding with an intention to convert GAC Changfeng, which makes vehicles with Mitsubishi and other brand names and provides automobile components, into a 50/50 joint venture and to delist Changfeng.
Guangzhou Auto, which has been expanding through mergers and acquisitions in recent years, has said it forecast 2011 net profit will not be less than 4.96 billion yuan compared with 4.3 billion yuan profit in 2010.
No money will be raised through the new A-share issue but a listing on the domestic market will help promote Guangzhou Auto's brand in China, the world's biggest and fastest growing major auto market, analysts said.
Guangzhou Auto, which holds 29 percent of GAC Changfeng, proposed to swap 1.6 new yuan-denominated A shares or pay 12.65 yuan in cash for each existing Changfeng share it does not own, the company said in a statement late on Tuesday to the Hong Kong stock exchange.
Its partner Japan's Mitsubishi Motors Corp had decided to accept the cash offer and will receive a total of 961.4 million yuan for its 14.59 percent in Shanghai-listed Changfeng.
Guangzhou Auto will therefore issue not more than 470.11 million new A shares at 9.09 yuan each, representing 7.1 percent of the enlarged company's issued share capital, to implement the proposed merger.
If all other GAC Changfeng shareholders choose to exchange their interests in Changfeng for Guangzhou Auto's new A shares, the deal would be worth about 5.23 billion yuan, based on Reuters calculation.
The share exchange ratio represented a premium of 15 percent over the average trading price per Changfeng share of 12.65 yuan of the last 20 trading days. The stock was last traded at 14.07 yuan in October 2010 before being suspended, pending the merger statement.
The merger and A-share listing were subject to regulatory and shareholders' approval, it said.
In November, Guangzhou Auto and Mitsubishi signed a memorandum of understanding with an intention to convert GAC Changfeng, which makes vehicles with Mitsubishi and other brand names and provides automobile components, into a 50/50 joint venture and to delist Changfeng.
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