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Shanghai Automotive Co., owner of a fifth of General Motors' main China car plant, said its parent had won regulatory approval to shift its 70 percent stake in the listed firm to another unit.
The transfer would move control of the listed firm to Shanghai Automotive Group Co., a new unit set up at the end of 2004 to pave the way for parent Shanghai Automotive Industry (Group) Corp. (SAIC) to list overseas or at home in a public offering that could raise as much as US$2 billion in 2005 or beyond.
SAIC, China's top one car maker and GM’s main partner in China, set up the new holding firm for its car assets in a revamp ahead of the long-awaited IPO.
“The move will have no major impact on our company's ability to operate independently,” the listed company said in a statement, adding the transfer of shares had begun. It would issue another announcement when the shift was completed.
The new company will serve as the public face of SAIC and own its stakes in car making ventures with GM and Volkswagen AG in Shanghai. Including the listed unit’s stake, SAIC has half shares in ventures with those foreign companies.
(Shenzhen Daily April 4, 2005)
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