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| BYD e6 is an all-electric crossover car manufactured by BYD Auto scheduled to begin sales in US by the end of 2011 |
BYD Company Limited, a battery and automobile manufacturer based in China and 10 percent owned by Warren Buffet backed MidAmerican Energy Holdings, has announced that it would raise 1.42 billion renminbi (USD219.4 million) in its Shenzhen initial public offering (IPO), a significantly smaller amount than their initially projected 2.19 billion renminbi.
The company will be selling 79 million A-shares at 18 renminbi apiece, almost a third of the initial forecast. This final price was set as per investors’ initial offers and market sentiment. BYD would have preferred to delay the IPO’s opening for a less volatile time, but was legally bound to list publicly within two months of the approval of their sale share.
These new shares comprise 3.4 percent of the company’s enlarged share capital. In a statement released for the Shenzhen Stock Exchange, BYD has stipulated that the funds it raises will be used to increase its lithium battery production, expand their automobile activity and build a research and manufacturing facility. Its books were opened on June 21.
BYD has played a major role in China’s overtaking of the US as the world’s largest automobile market. It listed its H-shares in 2002 on the Hong Kong Stock Exchange, and set the record for the highest listing price for any H-share at the time. Growth for the industry, however, has slowed down following the end of the government stimulus package for car purchases. Compounded by rapidly growing competitors, BYD’s net profit in 2010 was down by 34 percent year-on-year to 2.52 billion renminbi.
Lead underwriter for the deal is UBS Securities.
