BYD raises 2.3b yuan by selling subsidiary
BYD, the Chinese carmaker backed by Warren Buffett, has agreed to sell a subsidiary to Holitech for 2.3 billion yuan (HK$2.88 billion), the company said in a filing to the Hong Kong stock exchange late Thursday.
Also Shenzhen-headquartered, Holitech is engaged in chemical raw materials, chemical products and touch screen businesses.
BYD shares opened 3.2 per cent higher at HK$27.80 on Friday.
It will acquire the entire stake of Shenzhen BYD Electronic Components paying 25 per cent of the consideration in cash. The rest will be paid by issuing 12.29 per cent of Holitech’s issued share capital to BYD at 9.64 a share.
“The group intends to allocate more resources to develop the new-energy vehicle business,” said BYD’s filing. “The directors consider the disposal to be an opportunity for the group to utilise resources allocated to the operations of the flexible circuit board, LCD display and modules and webcam businesses to develop the new energy vehicle business.”
The company said it expects a net profit of 1.63 billion yuan from the disposal.
BYD also said it will issue 3 billion yuan of corporate bonds in single or multiple tranches in China. The proceeds will be used as medium- and long-term funding and to improve the company’s debt structure, repay bank loans and supplement the company’s working capital, according to BYD.
