Guangzhou Auto says no plan to delist from HK

Denway Motors (0203.HK), a Chinese joint venture partner of Honda Motor Co, clarified on Monday that it had no plan to delist its shares from the Hong Kong stock exchange.

Deway said it was not aware of the sources cited by the South China Morning Post on Monday, which reported that Guangzhou Automotive Industry Corp may delist its 37.9-percent owned Denway Motors through a share buyback, and could not confirm its accuracy.

However, the company said there was no plan to delist its shares as reported by the newspaper.

Guangzhou Automotive may delist the company after it concludes a dual listing in Hong Kong and Shanghai by early November, the newspaper reported, citing sources.

Shares in Denway ended up 1.8 percent at HK$2.83 on Monday, beating a loss of 1.52 percent on the blue-chip Hang Seng Index.

A buyback would fold Denway back into Guangzhou Automotive as the Guangzhou government wants only one car maker in the province, eliminating the listing hurdle of what to do with the subsidiary, the newspaper said.

Guangzhou Automotive, a joint venture partner of Toyota Motor, plans to sell shares in the domestic A-share market by the end of October and then H-shares in Hong Kong in early November, aiming to raise $1 billion in the dual listing, the newspaper added. It gave no further details.

Guangzhou Automotive is interested but is unlikely to make a serious bid for Ford Motor's Volvo passenger car business until after completion of its dual listings in Hong Kong and Shanghai, the newspaper added.

Guangzhou Automotive said in July that it was investing 6.8 billion yuan ($993.8 million) to build a production base that would start assembling its first car under its own brand by 2010.