The Chinese venture of Kia, part of the Hyundai-Kia Group, is seeking to borrow US$250m to more than triple its production in China, according to a Bloomberg report.
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Dongfeng Yueda Kia Motors Co., in which Kia Motors has a 50% stake, will hire Citigroup Inc. to arrange the five-year financing, the venture’s first syndicated loan, Bloomberg reported.
Funds will be used to build Dongfeng Yueda’s second plant in China’s eastern Jiangsu province, which is capable of making 300,000 passenger cars a year, Bloomberg said.
The venture sold 77,000 cars in the first eight months of the year to meet 55% of its target for 2006, said Lee Hwan Wook, a manager of investor relations at Kia Motors in Seoul. Dongfeng Yueda Kia generated US$10m of profit in the first half of the year after recording a 59% growth in sales to US$690m by selling 64,000 cars, Lee told Bloomberg.
The venture’s first production facility can make 130,000 passenger cars a year, including Optima sedans. The second plant will be completed by the end of 2007.
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