Shanghai's SAIC sells major automaking holdings
Wednesday, July 12, 2006
Shanghai's SAIC sells major automaking holdings
Elaine Kurtenbach / Associated Press
SHANGHAI, China -- China's Shanghai Automotive Industry Corp., state-owned partner of General Motors and Volkswagen, announced Wednesday that it has sold its auto manufacturing assets to its publicly traded affiliate.
The deal, worth about 20 billion yuan ($2.5 billion), will result in the core assets of SAIC being included in Shanghai Automotive Co., which has shares traded on the Shanghai Stock Exchange.
The stock surged 8.3 percent to 6.12 yuan (76 cents) by early afternoon Wednesday. Trading of the stock was suspended Tuesday pending the announcement, which appeared in the state-run China Securities Journal.
Apart from its automaking units, the listed company would also eventually include SAIC's auto parts and financing subsidiaries, the statement said. Presumably, it also would include its automaking joint ventures with General Motors Corp. and Germany's Volkswagen AG, although they were not explicitly mentioned.
A spokesman at SAIC, who gave only his surname Zhang, referred inquirers to the written announcement. He would not provide any further information.
The announcement said that SAIC, which holds a controlling stake in Shanghai Automotive, would draw up and publicize a detailed plan for the share swap following a future board meeting.
The deal dovetails with China's efforts to beef up the quality of assets listed on the stock exchanges following shareholding reforms that shifted billions of dollars in nontradable, mostly state-owned shares into the market.
The plan also fits SAIC's ambitions to develop as an automaking giant in its own right and to raise funds in international markets. The company is widely expected to hold an initial public offering in Hong Kong, although it has not yet announced details of such a plan.
Until recently, SAIC has produced vehicles only under the brands of its foreign partners. But the company recently announced it was gearing up to begin making its own brand of cars, with an initial target of 600,000 SAIC vehicles a year by 2010.
Shanghai Automotive is to pay for the SAIC assets by issuing 3.1 billion shares at a price of 5.82 yuan (73 cents) each, raising 18 billion yuan ($2.25 billion), the announcement said. It also will swap another 2 billion yuan ($250 million) worth of other assets, the announcement in the China Securities Journal said.
© Copyright 2006 The Detroit News. All rights reserved.
Shanghai's SAIC sells major automaking holdings
Elaine Kurtenbach / Associated Press
SHANGHAI, China -- China's Shanghai Automotive Industry Corp., state-owned partner of General Motors and Volkswagen, announced Wednesday that it has sold its auto manufacturing assets to its publicly traded affiliate.
The deal, worth about 20 billion yuan ($2.5 billion), will result in the core assets of SAIC being included in Shanghai Automotive Co., which has shares traded on the Shanghai Stock Exchange.
The stock surged 8.3 percent to 6.12 yuan (76 cents) by early afternoon Wednesday. Trading of the stock was suspended Tuesday pending the announcement, which appeared in the state-run China Securities Journal.
Apart from its automaking units, the listed company would also eventually include SAIC's auto parts and financing subsidiaries, the statement said. Presumably, it also would include its automaking joint ventures with General Motors Corp. and Germany's Volkswagen AG, although they were not explicitly mentioned.
A spokesman at SAIC, who gave only his surname Zhang, referred inquirers to the written announcement. He would not provide any further information.
The announcement said that SAIC, which holds a controlling stake in Shanghai Automotive, would draw up and publicize a detailed plan for the share swap following a future board meeting.
The deal dovetails with China's efforts to beef up the quality of assets listed on the stock exchanges following shareholding reforms that shifted billions of dollars in nontradable, mostly state-owned shares into the market.
The plan also fits SAIC's ambitions to develop as an automaking giant in its own right and to raise funds in international markets. The company is widely expected to hold an initial public offering in Hong Kong, although it has not yet announced details of such a plan.
Until recently, SAIC has produced vehicles only under the brands of its foreign partners. But the company recently announced it was gearing up to begin making its own brand of cars, with an initial target of 600,000 SAIC vehicles a year by 2010.
Shanghai Automotive is to pay for the SAIC assets by issuing 3.1 billion shares at a price of 5.82 yuan (73 cents) each, raising 18 billion yuan ($2.25 billion), the announcement said. It also will swap another 2 billion yuan ($250 million) worth of other assets, the announcement in the China Securities Journal said.
© Copyright 2006 The Detroit News. All rights reserved.
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