Share sale to fund purchase of production units from parent
Mainland carmaker Geely Automobile Holdings plans to sell new shares to buy car assets from its parent in a bid to gain full control of the group's production units, a source said.
Geely Automobile owns 46.8 per cent of four production units while its Hangzhou-based parent, Geely Holding Group, and its chairman Li Shufu hold 53.2 per cent.
The combined book value of the stakes Geely Automobile does not own is estimated at HK$1.9 billion. Trading in Geely Automobile shares was suspended yesterday afternoon pending an announcement on an acquisition.
The stock closed 8.96 per cent higher at HK$1.46 in the morning session. It has gained 89.47 per cent over the past 12 months.
The deal is poised to make Geely Automobile the first foreign-registered firm to hold a majority stake in mainland car production assets.