BYD plans Shenzhen share issue to fund growth

Shanghai, July 16 (Gasgoo.com) Chinese battery and electric car maker BYD Co. (1211.HK) said it planned to issue as many as 100 million A shares on the Shenzhen Stock Exchange to raise capital for battery and auto development projects, Reuters reported today.

The company said today the cash raised would be used to fund lithium-ion and solar battery production and the expansion of auto products and accessories. BYD needs a lot of investment into development of alternative energy vehicles, and a mainland share offering will meet some of its capital needs, said an industry analyst.

BYD said it would seek shareholder approval for the listing plan in a meeting to be held on September 11, but gave no further details. BYD originally proposed a Shenzhen or Shanghai listing in January last year but delayed the plan due to the weak performance of the A share market in 2008.

China halved sales tax on small cars to 5% in January to boost the auto market. That helped BYD's sales to more than double from a year earlier to 176,814 units in the first half this year, with its market share growing to 5.45%. BYD aims to achieve sales of 400,000 vehicles in 2009.

The company last year agreed to sell about 10% stake to MidAmerican Energy Holdings Co., a unit of Buffett's Berkshire Hathaway Inc.