(Bloomberg) -- BYD Co., the Chinese automaker backed by Warren Buffett, won regulatory approval for an initial share sale on the Shenzhen exchange to fund its expansion in the world’s biggest vehicle market.
The China Securities Regulatory Commission approved the planned A share issue, according to a statement posted on the watchdog’s Web site. Hong Kong-listed BYD awaits written approval and will announce Shenzhen IPO details later, according to a Hong Kong stock exchange filing yesterday.
BYD plans to offer as many as 79 million Class A shares in Shenzhen, where the company is based, according to a statement filed to the Hong Kong stock exchange on May 5. BYD said it will use the proceeds to develop its auto and rechargeable-batteries businesses, and to expand into car products and accessories.
The carmaker raised HK$1.4 billion ($180 million) in an initial public offering in Hong Kong in July 2002 by selling shares at HK$10.95 each. The stock has since gained 157 percent, closing at HK$28.20 on Monday.
BYD’s vehicle sales fell for nine straight months through April amid rising competition from rivals General Motors Co., Volkswagen AG and Nissan Motor Co. Buffett’s Berkshire Hathaway Inc. holds a 10 percent stake in BYD.