Tour fuels talk of Blackstone interest in Jianghuai Auto stake

PUBLISHED : Thursday, 20 September, 2007, 12:00am
UPDATED : Thursday, 20 September, 2007, 12:00am

Speculation about Blackstone Group's interest in Jianghuai Automobile Group strengthened yesterday after news emerged of the United States buyout firm's recent secret tour of the Anhui truckmaker's plants.

Some Blackstone executives visited Jianghuai Auto's factories last month and both parties showed 'considerable interest' in co-operation, Shanghai Securities News reported yesterday, citing unnamed sources.

It quoted Blackstone chief executive Stephen Schwarzman as saying during the tour that his company had made good profits from investing in vehicle-related industries globally, but stopped short of confirming an investment plan in Jianghuai Automobile.

Jianghuai Automobile controls listed firms Anhui Jianghuai Automobile and Anhui Ankai Automobile. It started by supplying vehicle parts to major mainland manufacturers and then began making light trucks and commercial vehicles.

Statistics released by the group show its vehicle sales reached 10.1 billion yuan in the first half of this year, up 20 per cent from a year earlier.

Vice-president Wang Zhiyuan said earlier the group was searching for strategic partners to diversify its ownership structure and improve its asset quality.

Yu Wei, a vehicle industry researcher at Wanguo Ceping Stock Consulting, said institutional investors had bought Shanghai-listed Jianghuai Automobile's shares heavily in recent months, a sign that often preceded high-profile mergers and acquisitions.

'The fundamentals [of Jianghuai Automobile] are good, but it looks like a secret hand has been pushing the price up in the past month,' Mr Yu said.

Jianghuai Automobile closed at 11.66 yuan yesterday, a 26 fen gain, and Shenzhen-listed Ankai Automobile closed two fen higher at 8.22 yuan.

Blackstone earlier made its first investment on the mainland, paying US$600 million to acquire a 20 per cent stake in China National Bluestar Corp.