China's BAIC Motor to seek listing approval in Hong Kong on Thursday

Mainland carmaker BAIC Motor Corp, partly owned by German giant Daimler, is scheduled to seek a listing approval in a hearing with the Hong Kong stock exchange on Thursday, moving a step closer to its long-planned US$2 billion initial share offering.

The Beijing-based firm, which manufactures Hyundai and Mercedes-branded vehicles for the mainland market through joint-venture agreements, will release the price range of its initial public offering on December 4, and price the deal on December 13, according to people familiar with the transaction.

BAIC is finalising cornerstone and strategic investors, who are expected to take the bulk of the new shares, the sources said.

"After a short-lived stock rally early this year, investor appetite for Chinese car stocks has increased partly as a result of expectations of restructuring in state-owned enterprises," said a syndicate manager familiar with the company.

"Unlike environmental stocks, demand for car companies remains tepid, but sentiment has improved on hopes that state-owned enterprises will change their ways."

Following the Ministry of Industry and Information's reform guidelines, small car manufacturers will be acquired by larger rivals.

BAIC has bought a 70 per cent stake in Jiangxi-based ChangHe Auto, allowing better utilisation of production capacity.