Changan Auto to raise $599 mln via share sale

Chongqing Changan Automobile Co , a Chinese joint venture partner of Ford Motor plans to raise up to 4 billion yuan ($599 million) this month by selling additional shares to fund expansion.

Changan Auto, China's eighth biggest auto maker by market capitalisation, will sell as many as 465 million shares, or a 20 percent stake at 9.74 yuan per share, in line with its last closing price of 8.71 yuan, the company said in a statement to the Shenzhen Stock Exchange on Friday.

Changan Auto, which started out as a mini van maker, unveiled a new logo for its fast-growing passenger car business in October, as China's indigenous car makers such as Geely Automobile group to Chery Automobile try to broaden their image beyond that of purveyors of affordable but lower quality cars.

"Currently, the company is still at an early stage in the manufacturing, marketing and branding of our self-brand cars," Changan Auto said in the statement.

"If our products cannot increase market share to a certain level during a reasonable period of time, we cannot realize our business strategy or recoup our investment, which would hurt our business and financial strengthen."

Changan Auto, which competes with bigger rivals including SAIC Motor and Dongfeng Group in the world's biggest auto market, said it would use the proceeds from the share offering to expand production, upgrade technology and fund research.

The company obtained regulatory green light for the share sale in November and will start taking subscriptions from investors on Jan 11.