China: Beijing Auto to raise $3.23 billion in IPO image

Beijing Automotive Group, a company that currently partners with Daimler and Hyundai to make cars, hopes to raise as much as 20 billion yuan ($3.23 billion) in an initial public offering in Hong Kong.

Beijing Auto is currently a state owned company – but that should change when the car unit goes public, and aims to meet a target of selling 3.6 million cars by 2015. To do so, the company is currently looking to purchase a foreign brand – European or from the US and has enlisted the help of Ferrari designer Leonardo Fioravanti to make its brand more appealing and also reach “world-class” designs for its cars by 2025.

“Our Hong Kong IPO will be in the second half of this year, and we plan to raise 10 billion to 20 billion yuan,” said Beijing Auto Chairman Xu Heyi on the sidelines of Boao Forum on China’s Hainan Island.

To handle the car division IPO, sources say the company has hired Goldman Sachs Group and Morgan Stanley, while Xu Heyi also expressed interesting in selling some of the shares after the IPO’s conclusion.

In the mean time, just last month Daimler announced its plans to expand the partnership with Beijing Automotive – aiming to invest 1 billion euros ($1.38 billion) to more than double Mercedes-Benz cars capacity and also increase engine production at their shared Beijing plant.

Via Bloomberg