Beiqi Foton to inject $50 mln into JV with Cummins to overcome capital shortage
Beiqi Foton Motor Company said it will pump 340 million yuan (50 million U.S. dollars) into its joint venture, Beijing Foton Cummins Engine Co., by the end of next year to ease the company's funds shortage.
Beiqi Foton plans to inject 165 million yuan into the joint venture in which it holds a 50 percent stake this year, the company said in a report filed with the Shanghai Stock Exchange. It will pump another 175 million yuan into the company in 2011.
The joint venture faces a funds shortage of 680 million yuan over the next two years as 2009 sales were lower than expected and after it splashed out on developing the Euro V and Euro VI engines.
The funds injection will help solve the joint venture's capital shortage problem,the report said.
The other two stakeholders, Cummins Inc. and Cummins (China) Investment Co., will invest 68 million yuan and 272 million yuan, respectively, into the JV in the coming two years to bring the total funds injection to 680 million yuan.
