Lifan switches IPO to Shanghai from HK
(Chinadaily.com.cn)Updated: 2007-06-11 13:38 Chongqing Lifan Holdings, China's biggest motorcycle exporter, said it plans to sell as much as a 25 percent stake though an initial public offering (IPO) to take advantage of a stock market boom and fund overseas expansion.
The automaker, which had originally planned to sell shares in Hong Kong, is preparing to list in Shanghai as the Chinese government is encouraging local equity offerings, Lifan President Yin Mingshan said in a June 9 interview in Beijing.
Lifan, based in the southwestern city of Chongqing, started
making compact cars in 2006 with a model named the 520. The company plans to
raise 4.5 billion yuan (US$588 million) by 2015 through share sales, bank loans
and commercial bills to fund eight overseas plants and boost sales of cars,
buses and trucks by 12-fold to 600,000 vehicles from about 50,000 last year.
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LChina's CSI 300 Index has almost tripled in 12 months. The measure advanced 9.3 percent in the last four trading sessions, rebounding after a tripling of the tax on share trades triggered a rout that erased more than US$400 billion of market value.
Lifan plans to sell shares at a valuation of at least 20 times earnings, Yin said, declining to elaborate. About 65 percent of the funds raised from the share sale will be used to fund automobile manufacturing, he said.
``Regulators are granting approvals for mainland companies' Hong Kong IPOs at a slower pace nowadays as they try to encourage us to seek mainland listings,'' he added.
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