BAIC plans to reduce shares in Foton, potentially in preparation for Foton¡¯s future cooperation with Borgward
Gasgoo.com (Shanghai July 9) -BAIC Group has reduced its shares in Foton Motor, theNational Business Dailyreported today. According to an official statement from Foton, BAIC will reduce no more than 100 million shares in the company by the end of next May.
BAIC has actually begun reducing its shares in Foton as early as last November. In response to the news, Foton put out an announcement stating that BAIC would increase its holdings in the company by no more than 10 million shares.
Cao He, an analyst with China Minzu Securities, explained that BAIC¡¯s decisions were nothing out of the ordinary, since Foton was to begin non-public sales of shares in the company this year. Mr. Cao added that BAIC¡¯s decision may also be due to operational changes in Foton, such as Foton¡¯s agreement to cooperate with the German Borgward brand. ¡°BAIC¡¯s decision may very likely have been made in order to give way for a new shareholder, which in turn may be responsible for providing the capital for the upcoming project with Borgward.
Earlier this month, representatives from Foton issued the following statement: ¡°Foton will be one of Borgward¡¯s key global and Chinese partners.¡± The partnership with Borgward has been expected to be a major development opportunity for Foton to increase its presence in the Chinese sedan segment.
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