China's Car Maker BYD Receives Approval for Mainland IPO

Funds raised, $337 million, will provide for a lithium-ion battery project.

BYD, backed by Warren Buffett, has received the green light for a mainland stock listing, China's securities regulator has said.

The China Securities Regulatory Commission announced the approval in a statement on May 10 after a meeting assessing the planned listing on the Shenzhen Stock Exchange.

The company, already listed in Hong Kong, plans to issue up to 79 million A-shares in the initial public offering (IPO), or 3.36% of its enlarged share capital, according to a draft prospectus.

The proceeds from the IPO will provide 2.19 billion yuan (US$337.3 million) for a lithium-ion battery project, a research and development cenetr and expansion of its product line, which require total investments of around 5.4 billion yuan, it said.

BYD has said the listing will take place soon, without giving a specific timetable.

Shenzhen-based BYD, which began as a manufacturer of rechargeable lithium-ion and nickel batteries, drew international attention when Buffett bought a 9.89% stake in it in 2008 for $230 million.

Last year, BYD's car sales in China hit 519,800 units, up 15.9% from 2009, but 13% below its target of 600,000.

A BYD spokesman said earlier this year that the company's auto sales were expected to grow 10% to 15% in 2011.

Copyright Agence France-Presse, 2011

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