Chery denies market rumors of sale to private investors to raise funds

Updated 2017-10-10 14:01:53 Global Times

Chery Automobile Co does not have any plans to "sell the company as a whole" to private investors, and it "has not decided on strategic partners," Chery said on Monday, responding to market rumors that it sought a purchaser due to a capital crunch.

"In recent years, domestic private capital has been keen on investing in the auto industry thanks to the development of new technologies such as new-energy vehicles and autonomous driving. Chery has also rolled out a series of plans in line with the market trends," the company said in a post on its Weibo account.

It said that "Chery's cooperation with the capital market has been going on for years, and there are numerous sources of private capital showing interest [in further cooperation]".

"Once a partner has been arranged, we [Chery] will share the good news with the market as soon as possible," it continued.

On Monday morning, industry website cited sources close to the matter as saying that "Cherry has been sold as a whole". The report indicated that either property giant Baoneng Group or State-owned distiller Kweichow Moutai Co was the buyer.

The report sparked market speculation that Baoneng is actually not, as market rumors have indicated, looking to purchase shares of Qoros, a joint venture between Cheery and Israel-based Kenon Holdings, domestic news website cited industry analysts as saying.

"The private firm is aiming at something bigger, Qoros' parent company Chery," said the report.

Chery has reportedly been in need of capital in recent years, as spending on research and development may have taken up the majority of its income, news site reported.

As of June 2016, Chery's debt stood at 54.29 billion yuan (.19 billion), equivalent to 74.86 percent of its assets, reported, citing an IPO prospectus of Chery. The debt ratio stood at 74.46 percent and 74.76 percent, respectively, in 2014 and 2015.

In 2016, Chery's revenue was estimated to reach 32.94 billion yuan, but its profit only stood at 206 million yuan, reported.

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