Beijing Automotive Industry Holding Co (BAIC), China's fifth-biggest car maker, is in talks with investment banks to float its passenger car business in an effort to cash up to fuel growth and make acquisitions.
President Wang Dazong told Reuters on Friday the company plans to announce a grouping of its passenger vehicle businesses within two months -- a crucial preparatory step before floating the unit.
The firm, which produces vehicles in partnerships with Daimler and Hyundai Motor, aims to raise capital to help it expand and quickly move up the ladder, less than half a year since it paid $200 million to buy technologies from General Motors's GM.UL Saab unit.
"We are talking to major investment banks at this stage but haven't picked them (underwriters) yet," Wang said in an interview at BAIC's headquarters in Beijing.
"To be a modern enterprise, it's important to open up the channel of capital," said Wang, who spent more than two decades working for GM in the United States.
Analysts said it was difficult to estimate the IPO value due to lack of detail on BAIC's passenger car business.
"It's difficult to give a price tag. It has just started the passenger business," said John Zeng, an analyst with IHS Global Insight.
OPEN TO ACQUISITIONS
Wang said BAIC was in "serious talks" with firms in the automobile industry, both at home and abroad.
BAIC is among a few Chinese firms that attempted to snap up overseas automakers hit hard by the financial crisis. The parent of Chinese carmaker Geely Automobile (0175.HK) took over Swedish car brand Volvo from Ford (F.N) earlier this year.
Acquisition is always a tool to help a company grow, Wang said, without identifying targets.
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