Hyundai opposes partner BAIC's stock offering, report says
Beijing Automotive Industry Holding Corp. (BAIC) plans to raise capital through an initial public offering, but partner Hyundai Motor Co. doesn't like the plan, says Caing, a well-known business news Web site.
BAIC wants to raise money via the domestic stock market to build its fledgling own-brand vehicle business unit. To develop its own models, BAIC will use platforms and engines purchased from Saab last December.
Aside from its own-brand activities, BAIC runs 50-50 joint ventures with Hyundai and Daimler AG.
Hyundai opposes an initial public offering because it fears BAIC will emerge with a strong rival brand, Caing reports, citing several sources with BAIC. Hyundai also doesn't want to disclose information about its corporate parent in Korea.
As part of its preparations for a stock issuance, BAIC has hired accounting firms to audit assets of Beijing-Hyundai. But managers at the joint venture representing Hyundai refused to let the auditors in, Caijing quoted an unnamed BAIC source as saying.
Beijing Hyundai Motor Co., the joint venture between BAIC and Hyundai, is BAIC's most valuable asset, according to Caing.
In 2009, Beijing Hyundai generated more than half of BAIC's revenue and profit. In the first six months of 2010, the joint venture sold 348,388 units, up 30 percent year-on-year, according to Automotive Resources Asia, a J.D. Power unit.
