Huarong Asset invests in Chery Auto, eyeing IPO

Shanghai, June 15 (Gasgoo.com) China Huarong Asset Management Corp. confirmed on Saturday that it invested 300 million yuan ($43.93 mln) to take a stake in Chery Automobile Co., and plans to launch an initial public offering (IPO) within the next three to five years, xinhuanet.com reported today.

Huarong Asset didn't give the size of its stake in the automaker. Earlier this month, Chery Auto raised a total 2.9 billion yuan in capital from domestic investors, including the asset clearing agency as well as Bohai Industrial Investment Fund Management Co., CDH Investments, and a Shenzhen-based investment fund.

Huarong said that it is seeking to introduce strategic investors at "an appropriate time" and plans to conduct an IPO within the next three to five years. The state-controlled asset clearing agency's statement over the weekend was the first time it had given a timetable for its IPO.

Local media reported early last year that Huarong had set up an office to prepare for a listing, but said the company hadn't decided on whether to list as a whole or list its units first. Huarong is one of China's four state-owned asset clearing agencies set up in 1999 to help clear bad debt from the country's four biggest state banks.

Huarong has been diversifying its operations as part of a plan to transform itself into all-around financial services group. Apart from its traditional debt-clearing business, Huarong has units specializing in areas including brokerage operations, leasing, and trusts.

Chery Auto is also pursuing a domestic IPO of stock in Shanghai, and the investment sets a valuation standard for an offering when Shanghai's exchange reopens to new IPOs. Chery has submitted the IPO application to China's securities regulator.