SHANGHAI, China (AP) – Beiqi Foton Motor Co., China’s biggest light-duty truck maker, said Thursday it plans to sell shares to DaimlerChrysler AG and its local partner Beijing Automotive Industry Holding Co.
Beijing-based Beiqi Foton will issue 297 million shares to DaimlerChrysler at 2.75 yuan, in an 817 million yuan ($104 million) private placement, the company said in a notice issued Thursday.
Beiqi Foton’s state-owned parent also will buy 426 million shares for 355 million yuan ($45.2 million), it said.
The state-run newspaper China Securities Journal reported Thursday that DaimlerChrysler will become the second-largest shareholder of Beiqi Foton after the private placement, with a 24 percent stake.
“We have been in discussions with Foton for quite some time to cooperate to offer medium- to heavy-duty trucks in China. Foton was and is our preferred partner for this market,” DaimlerChrysler spokesman Thomas Froehlich said in Stuttgart, Germany.
However, he added that the plans are still subject to approval, and said that “until these processes are completed, we cannot comment on details of a future cooperation.”
DaimlerChrysler, the world’s biggest truck maker by sales, recently has sought to expand sales in booming China and India to help make up for sluggish growth in other markets.
Beiqi Foton’s Shanghai-traded shares were suspended Wednesday pending the announcement. They closed at 3.61 yuan (46 cents) Tuesday.
The deal still requires regulatory approval, Beiqi Foton said.
The company said it will use funds raised with the share sale to upgrade its production lines, repay bank loans and supplement its working capital.
Beiqi Foton produced more than 310,000 vehicles in 2005.
In September, DaimlerChrysler formally opened its first factory to make Mercedes-Benz and Chrysler sedans in China – part of the company’s $1.9 billion investment in China.
The Beijing factory, which produces Mercedes E-Class and Chrysler 300C sedans, as well as Mitsubishi’s Outlander sport utility vehicles, is a joint venture with Beijing Automotive.