China automakers in urgent need of cash flow

Shanghai, December 5 (Gasgoo.com) The listed automakers Haima Auto, Brilliance Auto and Changfeng Motor said that they were in urgent need of increasing capital to replenish cash flow, reflecting automakers lacking money amid the financial crisis and economic downturn, Nanfang Daily said.

The listed automakers now have dropped the unrealistic hope of raising capital through the stock market; instead, they are turning to their parent companies or issuing corporate bonds to collect money.

Haima Auto is pleading to Haima Investment Group Co. to add capital of 500 million yuan, as the Hainan-based automaker couldn’t bear the increasing 1.4 billion yuan cost for building its new Zhenzhou production base. As a return, Haima Auto needs to give away 40% shares of the upcoming Haima Zhenzhou Auto Co.

Brilliance Auto announced this week it will get 500 million yuan from its shareholder Brilliance Auto Group, which will help the automaker increase cash flow to confront the economic crisis.

Chinese SUV maker Changfeng Motor Company also said this week that the company was to recruit capital by issuing bonds.

The announcement was reported Thursday at the boarding meeting held by Changfeng Motor, who claimed it has approved the proposal of issuing less than 500 million yuan corporate bonds, a selling also facing to the company shareholders.