Guangzhou Automobile, China's sixth-largest carmaker, said it plans to issue 0.378610 shares in itself for every Denway Motors share in a move to take the Hong Kong-listed unit private ahead of the parent company's listing.
Guangzhou Auto currently holds 37.9 percent of Denway.
Trading in Denway shares will resume on Wednesday.
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Denway shares have been suspended from trade since April 29, pending a statement on the progress of Guangzhou Auto's share listing. The stock is down 9 percent this year compared with an 8.8 percent decline in the Hang Seng Index .HSI.
Guangzhou Auto has applied to list in Hong Kong without raising no new money through an IPO ahead of the parent company's listing. Its listing plan through Denway will allow the company to simplify its structure for investors by taking its listed Denway unit, and replacing it with shares of the parent company.
