Zhengzhou Nissan to expand capital to 1.29 bln yuan

Zhengzhou Nissan Automobile Co Ltd, is expected to expand its capital to 1.29 billion yuan ($188.6 million) from the current 250 million yuan, as its three principal shareholders will invest a further 1.04 billion yuan in the joint venture (JV), said Dongfeng Auto Co. Ltd., one of the three principal shareholders.

Nissan (China) Investment holds 20.35%, Dongfeng Motor, the parent of Dongfeng Auto, holds 28.65%, and the remainder is held by Dongfeng Auto, in the JV.

The three shareholders will maintain their existing holdings in percent terms after infusion of new capital. The company said it will spend 3.076 billion yuan to build a new auto plant to expand capacity and meet the growing needs of the local market. First phase of the new plant, involving an investment of 985 million yuan, will be completed by 2009. By 2015, the new plant will be capable of producing 200,000 passenger vehicles a year.

Dongfeng Auto has announced plans to set up an engine joint venture with Dongfeng Motor, with registered capital of 720 million yuan. Total investment will reach 1.524 billion yuan. Dongfeng Auto will hold 51% of the new venture, while the remainder will be held by Dongfeng Auto. The venture is expected to operate in March 2009.