SAIC, which has joint ventures with Volkswagen and General Motors and owns a huge chunk of China's auto sector, said it hoped to raise up to US$2 billion in an initial public offering on a date still to be fixed.
Of 12 banks that bid for the mandate, it appointed Morgan Stanley, Merrill Lynch, Deutsche Bank and Bank of China International as global coordinator and sponsors, and named NM Rothschild and Sons as financial advisor.
Both Merrill and Deutsche had received an earlier mandate to arrange Renault-linked Dongfeng Auto's scheduled flotation.
In the expansion dept, SAIC announced it was seeking a 48.9% US$500 million stake in South Korea's Ssangyong Motor to expand overseas sales and build sport utility vehicles. That deal hinges on approval from majority shareholder Chohung Bank.
Closer to home, Beijing gave the green light to Guangzhou Automobile Industrial Group to proceed with negotiations with Toyota Motor over a proposed RMB 3.7 billion joint-venture car plant in Guangdong's capital city – to build 100,000 Camry sedans a year, with engines supplied by Toyota's nearby engine venture. DaimlerChrysler also announced it would expand its dealer network by opening 217 Mercedes-Benz dealerships in 68 mainland cities over eight years – up from the 33 dealers in 23 cities it had in 2002. The company was also reported to be negotiating on a truck and bus venture – and laying plans for an auto finance operation, something both Ford Credit and General Motors Acceptance Corp just won approval for in August. Following right on the heels of Ford Credit's approval, General Motors said the China Banking Regulatory Commission (CBRC) had given it the green light to proceed with forming a joint venture with Shanghai Automotive Group Finance to issue car loans. GM said it expected car financing in China would grow at 70-80% a year. Only 15-20% of cars are bought by hire purchase currently in China, as against nearly 80% in the US reportedly.
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