Ford Motor is planning a dim sum bond issue worth 500 million yuan (HK$612 million) in Hong Kong to raise funds for its mainland expansion, a person familiar with the offering said.
The Michigan-based carmaker was still fixing the price last night for the three-year yuan-denominated bond, which offers investors an annual fixed rate of between 5.25 per cent and 5.5 per cent, the person said. An official announcement is expected to be made today at the earliest.
Citigroup, Goldman Sachs and HSBC are the lead managers for the bond offering.
Ford is seeking to raise its profile and network in China, the world's largest car market, and catch up to more established rivals in the market, as it recently said it was cutting production capacity in German plants.
Apart from two assembly factories - one of which opened in Chongqing last month - the firm is also building transmission and engine plants on the mainland, which when combined would boost the firm's capacity by one million vehicles a year.
A company spokeswoman, Claire Li, said Ford was planning to spend millions of US dollars to double its mainland dealerships from 340 in 2010 to 700 by 2015. It plans to add around 100 dealerships on the mainland each year, especially in third- and fourth-tier cities.
'We go to market opportunistically as part of our overall strategic objective to finance our plan and improve our balance sheet,' Li said.