SAIC eyes US$1.5b to drive expansion
By Jin Jing |
June 24, 2010, Thursday
|
Print Edition
Print Edition
SAIC Motor Corp, China's largest auto group, plans a share replacement to raise about 10 billion yuan (US$1.47 billion) which would be used in unveiling new energy vehicles and self-branded cars, according to the 21st Century Business Herald yesterday.
SAIC, the Chinese partner of General Motors and Volkswagen, has invested 4 billion yuan to develop its MG-branded vehicles and it needs anther 6 billion yuan to promote the brand, the newspaper said, citing an unnamed source.
The car maker also plans to use the proceeds for technology innovation, expansion of its dealer network for self-branded vehicles as well as drive the new energy car business, the newspaper added.
SAIC proposed the share replacement after its 6.1 billion yuan of warrants issued in December 2007 were not fully exercised early this year as its share price fell amid a sluggish stock market.
SAIC told the Shanghai Stock Exchange over the weekend that its board of directors will discuss the non-public share issue and make an announcement by tomorrow. Its shares on the Shanghai Stock Exchange have been suspended since Monday.
Analysts said SAIC's financial position is strong and it is not short of capital. But SAIC prefers to have more capital as the car maker still needs to invest to enhance its competitiveness.
SAIC aims to sell 50 percent more vehicles, or 3 million units, this year including 180,000 self-branded vehicles.
SAIC also clarified on Monday that its cooperation with engine maker Kunming Yunnei Power would only cover diesel engines, denying earlier media reports which said SAIC would acquire the engine firm.
SAIC, the Chinese partner of General Motors and Volkswagen, has invested 4 billion yuan to develop its MG-branded vehicles and it needs anther 6 billion yuan to promote the brand, the newspaper said, citing an unnamed source.
The car maker also plans to use the proceeds for technology innovation, expansion of its dealer network for self-branded vehicles as well as drive the new energy car business, the newspaper added.
SAIC proposed the share replacement after its 6.1 billion yuan of warrants issued in December 2007 were not fully exercised early this year as its share price fell amid a sluggish stock market.
SAIC told the Shanghai Stock Exchange over the weekend that its board of directors will discuss the non-public share issue and make an announcement by tomorrow. Its shares on the Shanghai Stock Exchange have been suspended since Monday.
Analysts said SAIC's financial position is strong and it is not short of capital. But SAIC prefers to have more capital as the car maker still needs to invest to enhance its competitiveness.
SAIC aims to sell 50 percent more vehicles, or 3 million units, this year including 180,000 self-branded vehicles.
SAIC also clarified on Monday that its cooperation with engine maker Kunming Yunnei Power would only cover diesel engines, denying earlier media reports which said SAIC would acquire the engine firm.
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