China Daily, 14th February, 2011
China’s top carmaker SAIC Motor Corp. announced last week that it will suspend share trading on the Shanghai Stock Exchange from today as its parent company SAIC Group formulates restructuring plans.
The company did not disclose details about the plan in the statement. It said it will make an announcement five trading days following the suspension.
SAIC Motor Corp. is the Chinese partner of Volkswagen Group and General Motors Co. It operates businesses in vehicle and parts manufacturing as well as auto financing.
Huayu Automotive System Co. Ltd., another holding subsidiary of SAIC Group and an independent auto parts supplier, made the same announcement on the same day.
Industry insiders said the simultaneous move by both companies might be a signal that SAIC Group will take its final step toward listing in its entirety.
Shanghai Securities News cited a source close to SAIC Group saying that the parent company will inject its remaining assets into both subsidiaries and have all its assets listed.
The source said SAIC Group will put its assets related to vehicle manufacturing, service and trade into SAIC Motor Corp..
The group’s service and trade businesses are now the core parts of its unlisted assets, according to the report of Shanghai Securities News.
The report said SAIC Group has more than 70 auto service companies that provide logistics, financing, sales and service, car trading, asset management and auto information services. The remaining auto parts-related assets of SAIC Group are expected to be injected into Huayu, the report said.
Huayu announced at the end of last year that it intended to buy three parts companies from SAIC Group. Sixteen other parts suppliers belonging to Donghua Automotive Industrial Co. Ltd., a subsidiary of SAIC Group, are also likely to be transferred to Huayu, media reports said.
The listing of remaining assets could help SAIC Group avoid internal competition among its subsidiaries, analysts said.
Statistics from SAIC Motor Corp. showed that its January production increased 20 percent to 356,800 vehicles and sales surged 35 percent to 415,700 units.
Stock of SAIC Motor Corp. closed at 18.45 yuan on February 11, up 0.44 percent over the previous day. Shares of Huayu rose 0.16 percent to close at 12.81 yuan.
[Source: China Daily via China.org.cn]
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