Shanghai Automotive Industry Corp will inject 8.8-billion-yuan (US$1.28 billion) auto part assets into Shanghai Bashi Industrial Co.
Bashi is expected to sell 1.15 billion new shares, at 7.67 yuan each, to SAIC to purchase the auto maker's stakes in 31 auto part manufacturers, the Shanghai-listed firm said in a statement yesterday.
It will also spin off another 2.2 billion yuan worth of assets to its existing parent, Shanghai Jiushi, which has agreed to transfer all its stakes in Bashi to SAIC.
Bashi said in earlier statement that it plans to quit the public transport business under a government plan.
The transfer of the stakes will make SAIC the new parent of Bashi, as it will control 60 percent.
SAIC, the Chinese partner of General Motors Corp and Volkswagen, earlier injected its car-making assets into Shanghai-listed SAIC Motor Corp in its backdoor listing.
After the assets swap, Bashi's core business will shift from public transport, taxi services and logistics leasing to the development, manufacture and sales of auto parts.
But Bashi will continue to maintain a close look at the commercial market and after-sales market, and will also increase its exports.
Bashi believed profitability and assets quality will be improved after the restructuring. Its earnings per share are set to double to 0.34 yuan and net assets will rise 59 percent to 4.53 yuan. Bashi's shares fell to the daily 10 percent cap to 7.65 yuan while SAIC Motor reversed 4.2 percent to 7.99 yuan.
The Shanghai Composite Index fell 2.52 percent to 2,760.42 yesterday.
(Shanghai Daily June 24, 2008)
