Carmaker BYD applies to list new shares to fund 2.2b yuan expansion

BYD, the Hong Kong-listed mainland car and battery maker backed by US billionaire investor Warren Buffett, has applied to issue up to 79 million shares in Shenzhen.

It did not specify any time frame for the listing, but the China Securities Regulatory Commission is due to review the application on Monday.

The company did not disclose now much it hoped to raise from the A-share listing. But it said the proceeds from the listing would fund a 2.2 billion yuan (HK$2.63 billion) expansion plan, and the surplus would be used for working capital or to repay bank loans.

Under the expansion plan, nearly 1.8 billion yuan will be used to develop a research and development base in the company's home town of Shenzhen, and to expand its car parts division. Some 400 million yuan will be used to make lithium ion batteries.

An industry analyst in Hong Kong, who asked not to be named, said he was informed by BYD that a decision on the application should be known in about two months. But he questioned the timing of the carmaker's A-share listing proposal.

'Firstly, BYD's annual results last year were not good,' he said. 'Also, there are many big state-owned enterprises queuing up to issue new stock in the latter half of the year, and how good the chances are for BYD to get a piece of the pie is hard to tell.'