FAW Group Postponed IPO Plan image

FAW Group has postponed its stock listing, move which could affect its desire to land on A-share market before the fourth quarter.

Originally named First Automotive Works, the 50-year-old company has over 12 affiliates and subsidiaries. The group was preparing and consolidating its financial structure aiming for a smooth IPO launch, but things have taken a turn for the worse.

In 2007 FAW decided to list on the stock exchange the entire group including FAW Tianjin Xiali Automobile, a subsidiary in which Japan’s Toyota Group holds a 30% stake. But the plan wasn’t successful due to a major problem in the company’s shareholding structure with Toyota.

Lately the 30% owned by Toyota have been passed to FAW Co.,Ltd., a new company created by FAW in June 201, with a registered capital of 78 billion yuan (US$12.3 billion). The company invested the stakes in joint ventures and wholly owned firms such as FAW Car, FAW Volkswagen, FAW Tianjin Xiali Automobile, FAW Jiefang, and other joint ventures with GM and Toyota

“FAW Group’s overall listing process is complex,with many links unfinished such as how to deal with the equity issues with Xiali’s second largest shareholder Tianjin Automobile Industrial Group.” pointed an investment banker familiar with the listing process.