Tengzhong could use an offshore investment vehicle to buy Hummer
By Andrew C., 30 Aug, 2010. 0 Comments
Chinese government support for Sichuan Tengzhong Heavy Industrial Machinery Co., which seeks regulatory approval for its plan to acquire Hummer from General Motors Co., is getting murkier by the minute.
Amid reports that the Chinese government isn‚Äôt keen on Hummer‚ image as a gas-guzzler, Tengzhong could surely use an offshore investment facility to secure the deal. The fact that Tengzhong is a little known construction machinery maker with no experience in the auto industry has put it at a disadvantage. Continued after the jump!
Tengzhong has signed an initial deal with GM in October 2009. The deadline for this deal had to be pushed back to the end of February from a previous deadline of Jan. 31.
It‚ confusing then that China's Ministry of Commerce, which is responsible for the approval of outbound investment by Chinese companies, has repeatedly said that it has yet to receive an application from Tengzhong.
A source who spoke with Reuters said that the deal has a 50-50 chance of getting approved. Beijing‚ aim for a greener economy is working against the deal.
Despite these speculations, Tengzhong has not given up hope yet to win government approval. But if the firm doesn’t get this approval, it can opt for an offshore investment vehicle.
[via autonews - sub. required]
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