Beijing Auto Holdings to list

Before Chinese lunar New Year, Beijing Automobile Industry Holdings Company (Beijing Auto Holdings) signed a debt-restructuring agreement with Xinda Assets Management Company to deal with its historical debts and strategetic cooperation.

Analysts believe that this is a prelude to the listing of Beijing Auto Holdings. This debt restructuring has been completed at the end of 2006.

January 8th, 2007, in the annual meeting of the BSPC, Xiong Daxin, director of Beijing SASAC said, Beijing Auto Holdings is expected to be listed in 2007, and will guide the refinancing of listed companies, such as Beiqi Foton Motor.

For the listing of Beijing Auto Holdings, the Beijing government has given energetic supports. It is learned that this achievement of debt restructuring is mainly due to the efforts from BSPC, the Finance Bureau and other government departments of Beijing.

"Achievement of debt restructuring with Xinda Assets is particularly notable, which cleared the biggest obstacle to be listed." Beijing Auto Holdings Chairman Xu Heyi described this debt restructuring as the meaning of "sending charcoal to people in the snow” to the development of the Beijing auto industry.

State-owned automobile enterprises often have a heavy historical burden, particularly for the Beijing Auto and Dongfeng, the two enterprises had been faced with a huge debt problem. Dongfeng's successful listing can be an example of Beijing Auto Holdings.

Dongfeng Motor raised about 45 billion, about 70% was used to repay bank loans. Before its listing, Dongfeng Motor has carried out a large-scale reorganization, through a debt-to-equity swap arrangements with several major asset management companies, Huarong, Xinda, Dongfang, Great Wall Asset Management Corporation and the State Development Bank, which held exceeding 40% shares of Dongfeng for a long time.