Automotive News Europe/Reuters, 15th October, 2010
SHANGHAI (Reuters) – China’s top automaker SAIC Motor Corp. does not rule out the possibility of investing in General Motors Co’s initial public offering, SAIC Motor Chairman Hu Maoyuan said. When asked by reporters at a conference in Shanghai about SAIC Motor’s interest in the GM IPO, Hu said the company was undecided but would not rule out taking a stake.
“We will study and pay close attention to it, and yes, this is such a big IPO, and GM is moving to a very positive direction. I believe demand in the U.S. will pick up as the economy recovers,” Hu said on Friday. “We are positive on GM, we believe the restructuring is very good for GM. We can see that it is moving to a healthy direction of development,” he added.
In September, sources told Reuters that SAIC Motor had reached out to GM to explore the prospect of taking a stake in the U.S. automaker. The two companies have a 13-year old relationship.
“SAIC Motor and GM have had a solid partnership all these years. Many expect SAIC Motor to take a stake in GM when it goes public again,” said Huatai Securities analyst Chen Liang.
SAIC Motor and GM have had a solid partnership all these years. Many expect SAIC Motor to take a stake in GM when it goes public again. An equity tie will bring the partnership to the next level and GM could possibly step up its technology input in the joint venture.” Chen Liang, Analyst, Huatai Securities
“An equity tie will bring the partnership to the next level and GM could possibly step up its technology input in the joint venture,” Liang added, referring to Shanghai GM, GM’s flagship car venture with SAIC in the Chinese city.
The GM IPO has been closely watched both because of its expected scale and because of the involvement of the U.S. Government, which is looking to the landmark stock offering to reduce its nearly 61 percent stake in the automaker. The number of shares to be sold has not been set and that will not be determined until GM files the final prospectus in early November, sources told Reuters. GM Chairman Ed Whitacre recently said the shares are expected to debut at $20 to $25 each.
SAIC Motor said this week it expects net profit for the first nine months of the year to grow by at least 140 percent from a year earlier on strong vehicle demand. The company, which runs vehicle manufacturing ventures with General Motors and Volkswagen , sold 324,831 vehicles last month, it said in a statement to the stock exchange on Monday.
China, which overtook the United States as the world’s biggest auto market last year, has been a major bright spot as the global industry struggles to recover from a steep downturn. However, the market has been slowing since May as Beijing has taken measures to keep the economy from overheating.
[Source: Automotive News Europe/Reuters]
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