SAIC eyes funds for self-branded autos
By Jin Jing |
June 26, 2010, Saturday
|
Print Edition
Print Edition
SAIC Motor Corp yesterday said it plans to raise as much as 10 billion yuan (US$1.47 billion) through issuing new shares which will be used to fund development of self-branded vehicles and new-energy cars.
China's largest auto group, a partner of United States-based General Motors Corp and Germany's Volkswagen AG, would issue 900 million new shares to up to 10 investors, including its parent, SAIC Group, which agreed to buy at least 10 percent of the new stock for at least 1 billion yuan, according to its statement.
The new shares will be sold at a minimum of 11.47 yuan each, a 4.8 percent discount to its 12.05 yuan close on June 18, before trading in its shares was suspended.
The central government has been encouraging Chinese auto makers to develop self-branded vehicles to upgrade themselves and to compete more effectively against overseas rivals which have been dominant in the world's biggest car market.
"Focusing on self-branded vehicles is the right way for Chinese car makers to grow stronger," said Zhang Xu, an analyst at Shanxi Securities Co, adding that "vehicle design and development in parts technology can generate more profit" than just assembling vehicles.
SAIC said it would use 5.5 billion yuan of the proceeds to add capacity and roll out eight vehicles under the two brands. It also plans to invest 1.2 billion yuan in commercial vehicle projects and 2.7 billion yuan for the second phase of its research and development center. Another 6 million yuan will be spent in raising capacity of fuel-efficient double-clutch transmissions.
The car maker plans to double sales of its own-branded vehicles to 180,000 units this year.
China's largest auto group, a partner of United States-based General Motors Corp and Germany's Volkswagen AG, would issue 900 million new shares to up to 10 investors, including its parent, SAIC Group, which agreed to buy at least 10 percent of the new stock for at least 1 billion yuan, according to its statement.
The new shares will be sold at a minimum of 11.47 yuan each, a 4.8 percent discount to its 12.05 yuan close on June 18, before trading in its shares was suspended.
The central government has been encouraging Chinese auto makers to develop self-branded vehicles to upgrade themselves and to compete more effectively against overseas rivals which have been dominant in the world's biggest car market.
"Focusing on self-branded vehicles is the right way for Chinese car makers to grow stronger," said Zhang Xu, an analyst at Shanxi Securities Co, adding that "vehicle design and development in parts technology can generate more profit" than just assembling vehicles.
SAIC said it would use 5.5 billion yuan of the proceeds to add capacity and roll out eight vehicles under the two brands. It also plans to invest 1.2 billion yuan in commercial vehicle projects and 2.7 billion yuan for the second phase of its research and development center. Another 6 million yuan will be spent in raising capacity of fuel-efficient double-clutch transmissions.
The car maker plans to double sales of its own-branded vehicles to 180,000 units this year.
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