April 9 (Bloomberg) -- Beijing Automotive Group Co., which makes vehicles with Daimler AG and Hyundai Motor Co., said its car unit will raise as much as 20 billion yuan ($3.23 billion) in a Hong Kong initial public offering.
“Our Hong Kong IPO will be in the second half of this year, and we plan to raise 10 billion to 20 billion yuan,” Beijing Auto Chairman Xu Heyi told reporters yesterday on the sidelines of Boao Forum on China’s Hainan Island.
State-owned Beijing Auto traces its roots to making sidecar motorcycles used in the Korean War. It has said it plans to make “world-class” cars by 2025 and has hired Ferrari designer Leonardo Fioravanti to improve its brand appeal. The IPO will help the automaker meet its target of expanding sales to 3.6 million vehicles by 2015.
The company has hired Goldman Sachs Group Inc. and Morgan Stanley for the car-unit IPO, three people with knowledge of the matter said in January last year. In an interview in March last year, Xu said the company will seek to sell shares in the car unit in China after completing the Hong Kong IPO.
Stuttgart, Germany-based Daimler said last month that it will spend 1 billion euros ($1.38 billion) with Beijing Auto to more than double Mercedes-Benz production capacity at their Beijing plant to keep pace with rising demand. The companies will also increase engine production at the plant.
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