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Dongfeng Motor Group, China’s fourth-largest automaker, may raise as little as US$500 million from its first overseas share sale, half the original goal, after auto stocks slumped, people involved in the transaction said.
The company, whose business partners include Nissan Motor Co. and PSA Peugeot Citroen, was seeking as much as US$1 billion when it hired underwriters in April, betting its position in the world’s fastest-growing car market would attract investors.
Fund managers may be unwilling to pay a high price for its stock after shares of automakers slumped by as much as 58 percent since April because of a slump in production triggered by rising stockpiles.
Dongfeng, based in central China’s Hubei, was planning to sell the shares as early as May, the people said. The transaction requires approval from regulators in Hong Kong.
China International Capital Corp., Deutsche Bank AG and Merrill Lynch & Co. are arranging the company’s proposed share sale.
(Shenzhen Daily January 6, 2005)
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