Tianjin FAW Xiali Automobile’s controlling shareholder to offload stake as SOE reform moves forward
State-owned FAW Group said it’s got permission to sell its 25 per cent stake as Beijing’s mixed-ownership reforms move forward
Tianjin FAW Xiali Automobile, one of the most popular carmakers in China, said on Monday its controlling shareholder has been given government approval to shed its stake.
The company said in a filing to the Shenzhen Stock Exchange that it was told by state-owned China FAW Group Corporation, a vehicle manufacturer headquartered in Changchun, that it had obtained verbal approval to sell its 394.5 million shares, about a quarter of the total issued share capital.
Tianjin FAW Xiali said FAW Group got the go-ahead to sell its holding shares via a phone call from China’s State-owned Assets Supervision and Administration Commission (SASAC).
The SASAC is responsible for managing the remaining state-owned enterprises, including appointing top executives, approving any mergers or sales of stock or assets, and drafting laws.
The Chinese government has been encouraging state financing institutions and the country’s private technology giants to invest in weak state enterprises that are grappling with debt and inefficiency, under its “mixed ownership reform” programme.
In August, the state parent of China Unicom, the least profitable of the country’s three telecom operators, sold a combined 35.2 per cent equity stake to more than a dozen investors as part of a 78 billion yuan (US$11.9 billion) deal under the scheme. Among the new investors are Tencent Holdings, JD.com, Baidu and Alibaba Group.