According to people that have knowledge of the plans, Chinese automaker BYD Co., which is tied to Warren Buffett’s Berkshire Hathaway, is now envisioning a private A-share sale that would yield the company up to 10 billion yuan ($1.6 billion).
The sources, which have opted to remain anonymous because of the sensitivity of the subject, said the private share placement comes amid a favorable stock-market period, with the Shenzhen-traded shares now almost double in value since the start of the year. The people added the company was working on the placement with banks including China International Capital Corp., China Merchants Securities Co., Guosen Securities Co. and UBS Group AG. Further details, including the exact amount of the share sale have not been agreed upon and could change before being announced, the sources further disclosed. The company is also joining other Chinese firms in the rush to expand on the equity market. “It makes perfect sense to go ahead with a share placement now, given the rally in the market. BYD needs to boost investment in areas such as battery manufacturing,” commented Harry Chen, an analyst at Guotai Junan Securities Co. in Shenzhen.
BYD has rendered weight to the report coming from Bloomberg after they stopped trading of the Hong Kong and Shenzhen shares as they prepare to make an announcement. The company has upped its investment plans in Brazil, where it aims to spend 150 million reais ($48 million) to construct a solar-panel plant, which should be able to produce around 400 megawatts of solar panels annually. They also pledged to deliver more electric buses on the US market after securing recently a big contract from a mass-transit operator last month. They also want to deliver to the export markets, with the US most likely among the first, their electric trucks, with deliveries starting next year.