China's Foton scraps Daimler deal, says JV possible

SHANGHAI, Dec 3 - Chinese truck maker Beiqi Foton Motor Co said it has scrapped a share placement plan signed last year with DaimlerChrysler, which would have paid 817 million yuan for a 24 percent stake.

The Chinese company said in a statement over the weekend, however, that it would explore cooperative opportunities with Daimler AG in the medium- to heavy-duty truck sector, including a possible joint venture.

Foton had agreed in November 2006 to sell 297 million new A-shares to DaimlerChrysler, which has since sold a majority stake in its Chrysler unit, at 2.75 yuan per share.

But Foton's shares traded in Shanghai rose sharply thereafter, gaining 185 percent to 10.76 yuan as of last Friday, and the proposed stake sale failed to win the approval of the government, Foton said.

Foton's shares jumped a further 3.9 percent to 11.18 yuan in early trade on Monday, compared with a 1 percent drop in the Shanghai benchmark index .

Foton said it now planned to place as many as 111.2 million new shares with up to 10 institutional investors, adding that its state-run parent, Beijing Automotive Industry Holding, would buy 40 million shares for 395.2 million yuan.

DaimlerChrysler in May sold a roughly 80 percent stake in its loss-making Chrysler unit to Cerberus Capital Management for $7.4 billion.