Bohai Industrial Investment Fund Management and CDH Investments are among local private equity investors that have paid $293 million for a 20 percent stake in Chinese car maker Chery Automobile, according to The Wall Street Journal.
The capital will bolster Chery’s development, a spokesman told the daily.
CDH declined to comment. Bohai and Chery could not be reached for comment at press time.
Founded in 1997 by the government of China’s Anhui province, Chery manufactures a range of cars, sports utility and multi purpose vehicles and vans. Outside China, it has factories in Russia, Ukraine, Iran, Egypt, Indonesia, Uruguay, Malaysia and Thailand.
Chery has filed a petition to go public with the China Securities Regulatory Commission (CSRC). “But last year the market situation was very bad and the CSRC suspended all IPO approvals,” the spokesman told the WSJ, adding Chery has not heard of any progress regarding its IPO application.
Chery sold 356,000 vehicles in 2008, down from its sales target of 480,000 units set in the beginning of the year. The company intends to sell 419,000 vehicles in 2009, according to its website.
Automakers are struggling in light of the global financial crisis. US carmakers General Motors and Chrysler have filed for bankruptcy while Japanese carmakers Toyota and Honda stepped up production cuts earlier this year.
CDH Investments is currently raising an RMB-denominated fund, which is targeting RMB5 billion ($732 million; €515 million) in commitments. Last year, it received RMB1 billion from China’s National Council for Social Security Fund.
Established in December 2006, the state-backed Bohai Industry Investment Fund is presently raising RMB20 billion. The fund will invest in companies with limited access to bank loans in Tianjin’s Binhai New Area.