Chinese battery maker BYD to take over car firm

HONG KONG, Jan 23, 2003; Reuters reports that Chinese battery maker BYD Co Ltd said on Thursday it would acquire control of a state-owned car maker for 269.5 million yuan (US$32.6 million), to tap the country's fast-growing auto market.

BYD had agreed to buy a 77 percent stake in Xian Zhen Chuan Automobile Ltd from two state companies, it said in a statement.

Xian Zhen Chuan makes cars under the "Flyer" brand. It posted a net profit of 726,000 yuan in the year ended December 31, 2002, on turnover of 621.75 million yuan.

As at December 31, 2002, the car maker had unaudited net tangible assets of 401.27 million yuan, BYD said.

After the deal, the two vendors will hold the remaining 23 percent equity interest in Xian Zhen Chuan.

BYD said the acquisition was a move towards its strategy of producing rechargeable batteries for electric motor vehicles. It would also enable the firm to tap the Chinese auto market.

Shares in BYD closed at HK$18 on Wednesday, up five percent in the past three months.

Shenzhen-based BYD makes mobile phone batteries for companies like Motorola and Ericsson. The company was listed in Hong Kong last July.