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Great Wall Motor’s IPO gets government approval

Great Wall Motor Co. has received regulatory approval for a stock sale on the Shanghai exchange to raise 3.2 billion yuan ($490 million) to fund its expansion plan.

Great Wall, which is based in Baoding in Hebei province, plans to issue 304 million shares worth up to 10 percent of the company, according to a prospectus posted on the China Securities Regulatory Commission’s Web site.

The company will determine the price range later based on market conditions and the price of its Hong Kong-listed stock, it said.

China’s securities regulator rejected Great Wall Motor’s request for a Shanghai share listing in 2008, without giving a reason.

“The proceeds from the proposed A share issue are intended for use in expanding the production capacity of core automotive parts and components,” Great Wall said in a press release posted on the Web site of its public relations agency.

The company says it is raising money to boost output of engines, transmissions, axles and brakes, aluminum alloy cast parts and lighting.

The company expects to raise production capacity to 800,000 units within three years and expand its R&D capacity, according to the press release.

Last month, Great Wall said first-half net income probably rose more than 80 percent from 867 million yuan last year.

Source: Bloomberg

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