Parent company to obtain 10% stakes in Shanghai Auto

Shanghai Automotive Co. Ltd.<600104>, China's largest manufacturer of automobiles and related components, announced that its parent SAIC Motor Corp will be obtaining at least 10% stakes in the company.

SAIC had reported in an earlier statement that the company had already notified Shanghai Auto that it will foot RMB 800 million for a minimum of 800 million units.

In July this year, Shanghai Auto announced plans to release six-year-period bonds with detachable warrants, amounting to RMB 8 billion, to raise funds for the company's plans to develop its own brand of car models. Last week, the company decided to issue RMB 8 billion worth of bonds with warrants to existing shareholders, instead of extending it to public investors.

A Chinese partner of General Motors and Volkswagen, Shanghai Auto launched the company's first model in March this year, and has drafted out plans for another thirty or more models in the coming years.

In the first half of the year, Shanghai Auto posted a 358.1% surge in net profits, amounting to US$358 million.