Chinese industrial machinery firm Tengzhong is likely to establish an offshore investment vehicle to facilitate its purchase of Hummer.
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An anonymous company official, speaking to Reuters, said Tengzhong would be the majority stake holder in the special purpose vehicle (SPV), while Li Yan – also known as Suolang Duo Ji – the chairman of China’s chemical maker Lumena Resources Corp, and others would take minority stakes.
The report also said that Tengzhong has begun the long Chinese government approval process by submitting documents to the country’s National Development and Reform Commission.
Tengzhong has not begun the process to establish an SPV, because it must wait for the deal to be completed first, the official told Reuters.
Tengzhong still expects the deal to be completed in the third quarter this year, the report said.
However, reports in China have suggested that government approval for the purchase is by no means a simple formality.
