- BYD postpones plans to raise A-share funds on the Shenzhen Stock Exchange.
- The Chinese automaker will delay the listing proposal until September 11.
- BYD says the sluggish stock market is the reason for the postponement.
SHANGHAI, China — Chinese electric-vehicle maker BYD said it will postpone plans to list A-shares on the Shenzhen Stock Exchange after the local stock market plunged.
The carmaker, backed by U.S. billionaire investor Warren Buffett, intends to delay the listing proposal in the Chinese mainland by 12 months, to September 2011, according to a statement filed with the Hong Kong stock exchange, where BYD currently is listed. Shareholders will vote on the proposal at a meeting on August 30.
BYD's board of directors earlier had agreed to issue up to 100 million new shares on the Shenzhen exchange to raise as much as $420 million to fund expansion. The proposal, which has been submitted to the securities regulator, expires on September 7.
The proceeds of the A-share listing will be mainly used to expand production of vehicles and BYD's lithium-iron batteries, as well as to finance a solar battery project, the company said in an earlier statement.
Analysts said the recent sluggish stock market in China made it more difficult for BYD to entice investors to its A-share listing and it is waiting for a better time to list on the mainland.
BYD's vehicle sales in China jumped 63 percent to 289,000 units in the first half of this year.
Inside Line says: The Shanghai Composite Index, which tracks yuan-denominated A shares in China, has slumped 25 percent so far this year, and tightening credit and the Chinese government's efforts to curb property speculation have been blamed. — Vivian Jin, Correspondent
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