Chinese car-maker Geely gets OK for $206 mln buy

Chinese car maker Geely Automobile Holdings Ltd has won final approval to buy a 44.19 percent stake in each of five affiliated manufacturing units for $206 million, allowing the firm to get the five company's profits on its books.
 
Geely, one of China's most ambitious privately run firms, said on Wednesday it obtained final approval from the Ministry of Commerce to rase its interests in each of those units to 91 percent.
 
The company plans to issue HK$1.61 billion worth ($206.2 million) of new shares to buy the stakes from its similarly named corporate parent, controlled by Geely founder and Chairman Li Shufu, one of the country's richest self-made businessmen.
 
However, the issue price of HK$1.25 each represents a 36 percent premium to the stock's last close of HK$0.92 on Wednesday, Geely said in a statement.
 
After the transaction, the parent's interest in listed Geely will increase to 58 percent from 48 percent.
 
Geely group's auto businesses posted a combined revenue of about 7 billion yuan ($1.0 billion) in 2007. With the purchase of a clear majority in the five affiliates, the listed firm will be able to share in the majority of the operating profits from all its auto-related businesses, Geely said in a statement.
 
The listed firm's stock finished up 4.6 percent on Wednesday, beating a 2.1 percent rise on the index .HSCE for Chinese companies listed in Hong Kong.
From: Reuters

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