Shanghai, September 17 (Gasgoo.com) China's largest automaker SAIC Motor is expected to support its U.S. partner General Motors' initial public offering (IPO) plan in 2010 by injecting as much as one billion yuan ($147 million) into the GM IPO, Time Weekly reported today, citing sources familiar with the matter.
Soon after emerging from bankruptcy in early July, the new GM announced its plan for an initial public offering of stock as soon as in the first quarter of 2010 and this IPO plan has been approved by the Obama administration.
The Detroit auto giant hopes to use the proceeds to pay down some of the debt it owes to the U.S. and Canada governments, which together hold 72.5% stakes in the new GM. Meanwhile, GM CEO Fritz Henderson has said that his company will try to clear its government loans by 2015.
The public offering of the automaker will also allow its partners and the governments to sell their shares in the company to institutional and individual investors.
GM has been looking to the booming Chinese market for its global growth. GM's China sales in August jumped 112.7% year on year (y/y) to 152,365 vehicles, paving the way for a more than 40% rise in sales for the full year. In the first eight months, GM sold 1.11 million vehicles in China, up 49.6% y/y.
SAIC Motor has two flagship vehicle ventures with GM: passenger car venture Shanghai GM (Aug. sales: 63,303 units, up 99.6% y/y) and mini-van venture SAIC-GM-Wuling (Aug. sales: 88,711 units, up 122.6% y/y).
At the end of last month, GM launched joint venture with China's second largest automaker FAW Group to make light commercial vehicles in northeastern Chinese province of Heilongjiang.
