China’s BAIC hires banks for Hong Kong IPO image

The Chinese automaker is part owned by Daimler Ag, the parent company of Mercedes-Benz and it’s mulling for a Hong Kong initial public offering of up to $2 billion.

So far, the carmaker has enlisted four banks, HSBC, CITIC Securities International, Deutsche Bank and UBS AG, the news coming from the company’s filling with the Hong Kong Exchange. The state-backed BAIC Motor has also been reported to be involved with Goldman Sachs and Morgan Stanley on the proceedings of the IPO.

BAIC is the car passenger division of state-owned Beijing Automotive Group, which last November signed a 12% stake sale of BAIC Motor to German automaker Daimler, which paid 640 million euros to secure a increased Chinese presence and also leverage ownership in the company ahead of the long awaited and reported public offering.

BAIC is now only involved in producing Mercedes-Benz cars for Daimler, as it’s also a production partner for South Korea’s Hyundai Motor – while the IPO is aimed at funding Beijing Automotive Group’s increased global ambitions.

China’s passenger car market is still growing steadily, rising from 10 million units in 2009 to 17.9 million vehicles last year, while for the first half of 2014 the sales were still growing by around 10%, even as the overall economy is winding down.

Via Bloomberg