State-owned Beijing Automotive Industry has shortlisted Goldman Sachs and Morgan Stanley for a US$1 billion initial public offering in Hong Kong that may come as early as next year.
According to people close to the deal, the fifth-largest carmaker by sales on the mainland, is still undergoing financial and operational restructuring, and the listing is unlikely to take place this year.
Beijing Auto, better known as BAIC Motor, has spoken of an interest in a flotation in Hong Kong for the past three years but has so far failed to launch the share sale because of "some internal problems" and consideration of which assets should be taken for the long-planned offering.
Among its assets are major stakes in joint-venture projects with South Korean company Hyundai and a Daimler's Mercedes-Benz unit on the mainland. It also has a 51 per cent interest in a joint stock subsidiary with Shougang, one of the largest steelmakers in the country.
Its bid to list its passenger car unit would be followed by listings of its component and car service units, director Li Zhili said last year.
The listing of BAIC could raise 10 billion yuan (HK$12.4 billion) to produce "world class" Beijing-brand cars, company executives said. They also expected to double sales in four years.
BAIC sold 1.5 million cars last year, generating revenue of 201 billion yuan. In the first nine months of last year, sales rose 4.8 per cent from a year ago to 1.2 million units.
Meanwhile, banks remain under pressure to cut costs, with Morgan Stanley said to be poised to trim 6 per cent of its global headcount, or about 1,600 jobs in the institutional securities unit, which includes investment banking and capital markets. The planned cut comes just a week ahead of the release of its fourth-quarter earnings.