China's Geely Automobile moves towards mainland listing

Geely Automobile plans to roll out six new models under the Geely, Lynk and Geometry marques this year.It sold 1.36 million cars in 2019 and is targeting sales of around 1.4 million units this year.
By : Reuters
| Updated on: 18 Jun 2020, 07:50 AM
File photo: Employees working at the production line of Geely's Yuyao plant in China. (REUTERS)
File photo: Employees working at the production line of Geely's Yuyao plant in China. (REUTERS)
File photo: Employees working at the production line of Geely's Yuyao plant in China. (REUTERS)
File photo: Employees working at the production line of Geely's Yuyao plant in China.

Geely Automobile Holdings Ltd said on Wednesday its board had approved a preliminary proposal for the possible issue of renminbi shares and a listing on mainland China's Nasdaq-like STAR board.

The Zhejiang-based automaker, whose parent is Zhejiang Geely Holding Group, is currently listed on the Hong Kong Stock Exchange with a market capitalisation of 116.77 billion HKD ($15.07 billion).

Geely Automobile and its sister company Volvo Cars - which Zhejiang Geely Holding Group bought from Ford Motor Co in 2010 - are planning to merge and list in Hong Kong and possibly Stockholm.

Similar Cars

Find More Cars
Ford Figo (HT Auto photo)
Ford Figo
1194 cc | Petrol | Manual | 18.5 kmpl
₹5.49 - 8.43 Lakhs**Ex-showroom price
Ford Aspire (HT Auto photo)
Ford Aspire
1194 cc | Petrol | Manual | 18.5 kmpl
₹7.24 - 8.73 Lakhs**Ex-showroom price
Ford Freestyle (HT Auto photo)
Ford Freestyle
1194 cc | Petrol | Manual | 18.5 kmpl
₹7.27 - 9.03 Lakhs**Ex-showroom price
Ford Ecosport (HT Auto photo)
Ford Ecosport
1496 cc | Petrol | Manual | 15.9 kmpl
₹7.99 - 11.78 Lakhs**Ex-showroom price
Ford Endeavour (HT Auto photo)
Ford Endeavour
1996 cc | Diesel | Automatic (Torque Converter) | 13.9 kmpl
₹32.75 - 36.27 Lakhs**Ex-showroom price
Volvo Xc40 (HT Auto photo)
Volvo Xc40
1969 cc | Petrol | Automatic (Torque Converter) | 14.49 kmpl
₹41.25 Lakhs**Ex-showroom price

Apart from Volvo Cars, Zhejiang Geely Holding Group also holds a 9.7% stake in German luxury automaker Daimler AG, bought in 2018.

It said in a filing that the new renminbi shares on the Shanghai Stock Exchange would not involve conversion of existing shares. The board will hold further talks on the size of the issue.

(Also read: How Geely's Polestar is trying to bring down Tesla's dominance in China)

The money raised will be used for "business development and general working capital of the Group", it said, without elaboration.

"We believe such proceeds are likely to be used for the Volvo merger, although Geely cannot explicitly state it before the merger approval by disinterested shareholders," said Shi Ji, an analyst at Haitong International.

"It is a good way for the company to raise funds as valuations in the A-share market are usually higher than the H-share market," Shi added, comparing mainland and Hong Kong markets.

(Also read: China's Geely raises $836 million from share sale for business development)

Geely Automobile plans to roll out six new models under the Geely, Lynk&Co and Geometry marques this year. It sold 1.36 million cars in 2019 and is targeting sales of around 1.4 million units this year. It reported a profit of 8.19 billion yuan ($1.16 billion) last year.

Last month, it raised 6.48 billion HKD from a share placement.

First Published Date: 18 Jun 2020, 07:50 AM IST
Recommended For You
View All
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking VIEW OFFERS you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city