Shanghai Auto completes $2.4 billion restructuring

SHANGHAI -- Shanghai Automotive Co. Ltd., said today it had completed a $2.4 billion restructuring, transforming itself into the largest domestically listed automaker.

Under a plan unveiled in July, SAIC Motor Corp, the country's top car maker, transferred key operations to its unit Shanghai Auto in exchange for 19.09 billion yuan of new shares in the unit, securing a fund-raising channel to aid the group's global expansion.

Shanghai Auto now has a market value of 53.65 billion yuan ($6.8 billion) based on Tuesday's closing share price, making it one of the 20 most heavily capitalized companies on the domestic stock markets.

The restructuring significantly increases Shanghai Auto's net asset value and profits, the company said. Had the deal been in effect during the first half of 2006, it would have raised Shanghai Auto's earnings by 28.5 percent for the period.

Assets injected into Shanghai Auto include SAIC's stakes in ventures with General Motors and Volkswagen AG. Shanghai Auto already owned a fifth of GM's main car venture in China.

0

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Newsletters