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Geely Group, China's first privately owned carmaker, is expected to buy into a domestically listed firm within the month, which will help it raise funds from the stock market, company officials disclosed.
The company has been talking with four listed copanies to buy majority stakes in them, said company President Xu Guang, declining to identify the firms.
Industry insiders speculate that the most possible choice is Anhui Quanchai Engine Co Ltd, a major diesel engine manufacturer.
"Though the profits of Quanchai have dropped in recent years, its core business operation is not too bad," said Qian Xiangjin, an analyst with Jintong Securities. "And its shareholding structure is not complicated, which would guarantee the success of the purchase."
Geely planned to float shares on the domestic and Hong Kong stock markets early next year, but the shortage of funds has forced it to postpone the schedule.
"Since the automotive industry needs heavy investment, getting listed on the capital markets is an ideal way for us to grow rapidly," Xu said earlier.
"We aim to raise up to 500 million yuan (US$60.24 million) by selling additional shares through the listed companies in the mainland and Hong Kong," he said.
(Shanghai Daily June 9, 2003)
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