Tengzhong hasn't applied to buy Hummer yet

Shanghai, July 3 (Gasgoo.com) China's Ministry of Commerce hasn't received an application from Sichuan Tengzhong Heavy Industrial Machinery Co. regarding its planned purchase of General Motors Corp.'s Hummer division, Vice Commerce Minister Chen Jian said yesterday, media reported.

Chen said on the sidelines of a news conference that the ministry will consider Tengzhong's capabilities when making a decision on the purchase. China continued to support domestic companies with ambitions to invest overseas, but said many Chinese firms still lacked the experience operating in foreign markets, he said.

As a little-known Chinese machinery maker, Tengzhong raised eyebrows in early June when it unveiled a tentative plan to take over Hummer from General Motors. Doubts about whether the deal would get regulatory approval have been swirling as many believe Tengzhong lacks the experience and expertise in auto-making.

"The Ministry of Commerce's attitude is that it is the company's own business, and we would mainly look at whether you have the ability," said Chen, who emphasized that his ministry had not yet received any application from Tengzhong for the planned acquisition.

The gas-guzzling nature of the U.S. sport utility vehicle was cited by state media as reasons for expected opposition from the National Development and Reform Commission (NDRC), the country's top economic planner, which has urged carmakers to develop eco-friendly, fuel-efficient vehicles.

The Ministry of Commerce, which also scrutinizes all major cross-boarder investment deals by Chinese companies, first sounded a more positive note in mid-June, saying Tengzhong's move was normal for a company seeking to take advantage of the global downturn.

Tengzhong is hoping to complete the takeover, valued at around $500 million, by the third quarter this year after winning the approval of Chinese regulators, who have urged the machinery company to finalize its Hummer plan first with GM before applying for the regulatory approval.