Shanghai Auto will buy China car assets from parent
Shanghai Auto will pay for its purchase in cash and by issuing 3.28 billion new shares at 5.82 yuan each, according to its statement. After the transaction, SAIC will boost its stake in Shanghai Auto to 84% from the current 68%. The company said on July 13 it plans to issue 3.1 billion new shares to buy about 20 billion yuan worth of assets from its parent. Shanghai Auto's shares rose as much as 10%, the daily trading limit 28 August in Shanghai and changed hands at 5.69 yuan at 11:30 a.m. The stock has gained as much as 72% this year, compared with the 43% rise in the key Shanghai A share index.
Shanghai Auto had its first profit decline in three quarters in the three months ended June on rising costs. Net income fell 1.5% to 318 million yuan in the Q2. The company's operating costs rose 61% in the H1 from a year earlier to 3.78 billion yuan, with the gross profit margin falling 3.25 percentage points to 15.4%, the company said this month. SAIC, China's largest carmaker by sales, owns 50% of Shanghai Volkswagen Co., which has been making Santana cars in China since 1985 and also assembles Volkswagen's Passat, Gol and Polo models. SAIC also owns 30% of Shanghai General Motors Co., which assembles Buick Excelle sedans and GL8 vans. Shanghai Auto owns 20% of Shanghai GM. (Bloomberg)
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