SAIC Motor Group said an asset-restructuring plan had been approved by all relevant government authorities, according to official news agency Xinhua.
The Shanghai Automotive Industry Corp (Group) subsidiary has long held an ambition to become the first listed Chinese OEM to own its entire automobile manufacturing chain.
The company said in a filing with the Shanghai Stock Exchange the China Securities Regulatory Commission had approved its plan to raise funds and purchase assets from its parent.
SAIC Motor’s intention is to take over its parent’s vehicle assets. These are a 60.1% stake in the auto parts supplier Huayu and other automotive assets in 21 sub-companies, worth a total of CNY28.6bn. The company would fund the takeover by issuing 1.73bn shares at CNY16.53 each. Once the all-share deal has been completed, the managements of SAIC Group and SAIC Motor will merge, the firm said.
One of the main aims of the restructuring is to allow SAIC Motor, a manufacturing joint venture partner of Volkswagen Group and General Motors in China, to acquire operations in parts manufacturing, automobile-related service and trading, financing, and new energy car technologies from its parent, which controls some 80% of SAIC Motor.
Author: Glenn Brooks