July 13, 2010, 10:44 PM EDT
July 14 (Bloomberg) -- BYD Co., the Chinese carmaker backed by Warren Buffett, may delay an A-share listing in China to seek “better timing” for the sale after stock markets fell.
BYD’s board of directors requested a 12-month extension until Sept. 7, 2011, to prepare a listing, the Shenzhen-based company said in a statement to the Hong Kong exchange today. Shareholders will vote on the proposal at a meeting on Aug. 30.
The request comes after BYD’s Hong Kong-listed shares declined more than 30 percent from their highest level this year on April 7. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, has slumped 25 percent in 2010 on concern government efforts to curb inflation and property speculation will slow the economy.
“The domestic and global stock markets are not performing well, so we would like to have enough time to choose a better timing for the share sale,” Paul Lin, a spokesman for BYD, said by phone today.
BYD rose 2.6 percent to HK$55.80 as of 10:22 a.m. in Hong Kong trading. The shares have jumped fivefold since the company raised HK$1.4 billion ($180 million) selling shares for HK$10.95 apiece in an initial public offering in Hong Kong in July 2002.
‘Missed the Best Timing’
The company plans to offer as many as 100 million Class A shares in Shenzhen, it said in a statement to the Hong Kong exchange in July 2009. BYD, founded by chairman Wang Chuanfu, said it will use the proceeds to develop its auto and rechargeable-batteries businesses.
“BYD has no control over the A-share sale approval process as it is purely up to the regulators as to when they can actually go ahead with the sale,” said Ricon Xia, an analyst at Daiwa Institute of Research in Hong Kong. “BYD missed the best timing for the share sale when demand for their cars was soaring.”
The company was the fastest-growing carmaker by sales in China last year, more than doubling deliveries to 448,397 vehicles.
BYD’s sales to dealers rose 3.3 percent in June from a year earlier to 35,400 vehicles, lagging behind a 23 percent industrywide rise, according to the China Association of Automobile Manufacturers.
BYD aims to raise 2.85 billion yuan ($421 million) in the planned China share sale to fund lithium-battery and solar power-battery projects as well as vehicle and parts production and development projects, the company said in a separate statement today.
Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. holds a 10 percent stake in BYD.
BYD plans to offer all-electric e6 hatchbacks in the U.S. this year, following the domestic success of its gasoline- powered F3, China’s best-selling car.
--Tian Ying in Beijing. Editors: Terje Langeland, Ian Rowley
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