BYD shares sale tum­ble

The Pak Banker - - COMPANIES/BOSS -

BYD Co., the Chi­nese au­tomaker par­tially owned by War­ren Buf­fett's Berk­shire Hath­away Inc. (BRK/A), plans to sell new shares equiv­a­lent to as much as 20 per­cent of its Hong Kong-traded stock, said two peo­ple with knowl­edge of the mat­ter. The shares fell the most in al­most six months.

BYD hired Deutsche Bank AG and UBS AG to ar­range the sale and the com­pany's board may ap­prove the plan next week, said one of the peo­ple, who asked not to be iden­ti­fied be­cause the pro­posal hasn't been made pub­lic. Based on to­day's close, the sale would be worth as much as HK$3.85 bil­lion ($496 mil­lion), ac­cord­ing to data Veron­ica Jiang, a Shen­zhen-based BYD spokes­woman, said the com­pany doesn't cur­rently have plans to is­sue new shares and de­clined to elab­o­rate.

BYD's profit in 2012 prob­a­bly fell 94 per­cent to the low­est since 1999, based on pre­lim­i­nary com­pany es­ti­mates, as it faced in­creas­ing com­pe­ti­tion in its bat­tery busi­ness. The stock, which in 2009 traded at as high as HK$85.50 in Hong Kong, has tum­bled more than 70 per­cent since then.

To­day, the shares fell 7.8 per­cent to HK$24.25 in Hong Kong trad­ing, the big­gest de­cline since Sept. 26. The au­tomaker's stock has dou­bled since July as China said it will en­cour­age the use of alternative-en­ergy ve­hi­cles to cut pol­lu­tion and fuel con­sump­tion.

BYD's ve­hi­cle sales fell 18 per­cent to 77,004 units in the third quar­ter. In the first nine months of last year, BYD re­ceived 371.1 mil­lion yuan ($60 mil­lion) in government sub­si­dies for re­search and devel­op­ment and en­ergy-sav­ing au­to­mo­biles, help­ing it earn 20.8 mil­lion yuan in net in­come, ac­cord­ing to a fil­ing to the Hong Kong ex­change. The com­pany sold 3 bil­lion yuan of five-year bonds in June 2012.

China Devel­op­ment Bank agreed last year to pro­vide fi­nanc­ing to buy­ers of BYD's elec­tric buses and taxis so that they need no down pay­ment if the pur­chases are for pub­lic trans­porta­tion.

BYD won ap­proval in Jan­uary from the Euro­pean Union to sell its elec­tric buses in all mem­ber states with­out the need for in­di­vid­ual na­tional per­mis­sion. In De­cem­ber, the au­tomaker had agreed to set up a joint ven­ture with Bul­min­eral Ltd. to pro­duce elec­tric buses in Bul­garia. The au­tomaker also has a joint ven­ture with Daim­ler AG to pro­duce a newen­ergy ve­hi­cle.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.