BYD Said to Get $8.9 Billion Financing for Monorail DevelopmentBloomberg News
China Development Bank said to extend loan in BYD partnership
BYD sees monorail as the next growth area after electric cars
BYD Co., China’s largest electric-car manufacturer, secured a 60 billion yuan ($8.9 billion) loan commitment from China Development Bank to fund the development of its monorail business, people with knowledge of the matter said.
The company and lender are scheduled to sign the cooperation deal on Tuesday, according to the people, who asked not to be identified as they’re not authorized to speak to the media. BYD’s shares rose 1.3 percent to HK$52.05 at 1:02 p.m. in Hong Kong trading, while the Shenzhen-traded stock gained 2 percent.
BYD Chairman Wang Chuanfu said in an interview in June that monorail will represent the next major growth area for the electric carmaker given the prospects for the light-rail systems as a solution to urban gridlock for China’s smaller cities, which can’t afford to build and maintain expensive underground subways. BYD is in talks with several cities about building the elevated single-rail tracks, Wang said in June.
The monorail tracks can be built on road dividers and are especially suited for smaller, less-developed cities because they cost one-sixth the price of a subway system and are cheaper to maintain, Wang said. With the number of vehicles growing at an average annual rate of 15 percent in such cities and road space at only 1 percent, these urban areas are on course for the same gridlock gripping major Chinese cities like Beijing if they don’t adopt light transit, he said.
BYD, which counts Warren Buffett’s Berkshire Hathaway Inc. as a shareholder, first made batteries for handset manufacturers before venturing into electric vehicles.
A BYD representative declined to comment, while a spokesman for China Development Bank couldn’t immediately be reached. The Shanghai Securities News earlier reported the loan agreement, without citing anyone.
— With assistance by Ying Tian, and Steven Yang
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