Far East seeks 66b yuan for hybrid cars
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(China Daily/Agencies) Updated: 2009-11-24 08:11
Far East Golden Resources Group Ltd, headed by Yang Rong, who fled China in 2002, is seeking 66 billion yuan to build hybrid cars in the country, a sum about 44-times its market capitalization.
Three China-listed companies have agreed to back the plan, and Far East is also in talks with private-equity firms, Yang, also known as Yeung Yung, told reporters in Hong Kong yesterday by videoconference from the US. The company will soon name the three listed backers, he said, without elaboration.
Far East plans to begin making hybrid cars as China supports alternative-energy vehicles to pare oil imports and reduce pollution. The company has announced plans for a possible 20 billion yuan investment in Shenyang and for a $7.8 billion project in Alabama in the US.
A third of the funding for the Chinese hybrid-car venture may come from private-equity investors, said Yang. Far East would supply technology and management to the project and charge as much as $500 in licensing fees for each hybrid car sold, he said.
The company last week said it signed a memorandum of understanding to build a 10 billion yuan facility for making hybrid vehicle engines, transmissions and motors in the Shenyang-EU special economic zone. The planned plant will be able to make 1 million packs per year, according to a statement.
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The company also said it is considering building a 10 billion yuan factory for making 1 million cars a year in the same zone, located in northeastern China.
Far East's hybrid-car project in Alabama may begin production as early as next year, Chief Financial Officer Wilson Hui said. The company said in September that it formed a partnership that will seek investors to put up a minimum of $500,000 for shares to be sold in a private placement.
Yang, the former chairman of Brilliance China Automotive Holdings Ltd, said he might return to China on business related to the project. He didn't elaborate. Yang fled to the US after the government accused him of economic crimes.
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