Market volatility prompts detour for Great Wall IPO

PUBLISHED : Tuesday, 04 March, 2008, 12:00am
UPDATED : Tuesday, 04 March, 2008, 12:00am

Two major mainland carmakers appear to be taking different roads in response to recent A-share market volatility, with Great Wall Motor saying it may delay its listing plan in the domestic market while Beijing Automotive Industry Holding intends to push ahead with plans to sell shares this year.

'We aren't satisfied with the market situation on the mainland at the moment,' Great Wall chief executive Wang Fengying told Bloomberg in Beijing yesterday. 'We may hold off on our share sale if the situation doesn't improve.'

It would be the second time the mainland's largest pick-up truck and sport utility vehicle maker has shelved an A-share listing plan in four years.

The Hebei-based company originally planned to raise 2.7 billion yuan (HK$2.96 billion) by issuing 300 million A shares in Shanghai to fund the development of passenger cars.

Great Wall deputy general manager Bai Xuefei offered a different perspective. He said the company's domestic listing plan must be realised this year.

'The plan is just stuck in the examination process with the regulator now,' Mr Bai said without offering further explanation.

Beijing Automotive, however, was unequivocal. Chairman Xu Heyi said yesterday on the sidelines of the Chinese People's Political Consultative Conference that the company hoped to focus on its long-awaited listing plan this year. It would use the proceeds for expansion.

Although the company did not give precise figures, it indicated that it aimed to raise 'billions' of yuan in its initial public share offering and plans to produce its own brand of cars by 2010.

SAIC Motor Corp, the mainland's largest carmaker, took the lead in moving from being state-owned to becoming a public company in December 2006.

SAIC's parent firm has injected its own car model, Roewe, and added joint ventures with Volkswagen and General Motors Corp to its Shanghai-listed unit. A total of 19.1 billion yuan was raised to fund the further development of its own models.

Other mainland carmakers also are aggressively drawing up share sale plans. Jilin-based FAW Group Corp is planning to inject all of its car operations into Shenzhen-listed units Tianjin FAW Xiali Automobile and FAW Car.

Guangzhou Automotive Industry Corp hopes to launch it's A- and H-share listings in the first half. The proceeds will be used for its car-financing arm and the development of own-brand cars.

Fund raising

Several carmakers are aggressively drawing up share sale plans

Great Wall Motor had originally planned an IPO to raise, in yuan: 2.7b yuan