Customers inspect a Geely vehicle at an automobile market in Nanjing.
Geely Automobile Holdings Ltd, China's biggest privately owned carmaker's Hong Kong-listed arm, is in talks to sell $250-million worth convertible bonds and call warrants to a private equity fund of the Goldman Sachs Group Inc, according to media reports.
"The two sides have basically agreed on the investment in Geely already, but have yet to work out some technical details," Reuters reported yesterday citing a source with direct knowledge of the deal.
According to research firm FactSet Research Systems Inc, the investment is expected to give Goldman Sachs' PE fund 15 percent stake in Geely Auto.
Geely's listed arm plans to boost its production capacity through the investment, including tripling the annual output at its flagship car plant in Hunan to 150,000 units, and also to buy auto-related assets from its parent company, reported Financial Times.
A spokesman for Goldman Sachs in Hong Kong refused to comment. When contacted, Wang Ziliang, Geely Holding Group Co's vice-president, said: "If something happens, we will issue a statement."
Last Wednesday, Geely Auto shares were suspended at the Hong Kong Stock Exchange pending an announcement regarding the investment.
Its shares closed at HK$1.79 (23 cents) the day before its suspension, a decline of 3.24 percent.