China: Guangzhou Auto plans IPO early 2008,eyes

Guangzhou Automobile Group is planning to go IPO (initial public offering) early next year.

Sources familiar with the matter told the media that the size and location of the offering have not been finalized, but Hong Kong may be preferred as the initial location, also a Shanghai listing is considered. The IPO size is estimated between $900 million and $2 billion.

Noted investment banks, i.e. China International Capital Corp., J.P. Morgan Chase & Co., Lehman Brothers Holdings Inc., and Morgan Stanley will underwrite teh share offering. If the IPO goes smoothly, Guangdong Auto will seize the largest amount of fund among the Chinese automakers.

Since established in mid-2004, Guangzhou Auto Group has been looking to go public, but the project was delayed for the flat sales in 2005. Guangzhou Auto now has jumped as one of the leading automakers in China with the income this year forecast to top 100 billion RMB.  

Guangzhou Automobile Group operates two separate joint ventures (JVs) with Japanese automakers Toyota and Honda.