By intern reporter Wang Zhen
(Caijing.com.cn) Warren Buffett's Berkshire Hathaway Inc. has completed the purchase of a 9.89 percent stake in Chinese electric car manufacturer BYD Co., after winning approval from the China Securities Regulatory Commission, BYD said in a statement filed with Hong Kong stock exchanges on July 30.
Berkshire's subsidiary MidAmerican Energy Holdings agreed to buy 225 million of BYD’s Hong Kong listed shares for HK$ 8 apiece last September, totaling HK$ 1.8 billion. While waiting for regulatory approval, the automaker has jumped fivefold in trading since the deal was announced. Based on the July 30 stock price of HK$ 41.65, Buffett’s Berkshire has earned a HK$ 7.57 billion paper profit from the investment.
Under the deal, MidAmerican Energy will hold a 9.89 percent stake in BYD and appoint its chairman David L. Sokol as a non-executive director of the automaker.
After the transaction, BYD's registered capital will increase from 2.05 billion yuan to 2.28 billion yuan.
Wang Chuanfu, chairman of BYD, said last year that the partnership with MidAmerican would help BYD's products and technologies reach deeper into the global market.
MidAmerican Chairman David Sokol said that "as worldwide discussions relating to global climate change and environmental respect continue, the technologies being developed by BYD will be an integral part of the future."
As China's largest maker of battery and electric vehicles, BYD is planning to sell hybrid cars in the U.S. as early as 2010; as of last December, it has already started selling the F3 DM, the world’s first mass-produced plug- in hybrid.
Backed by the government’s support of new energy vehicles, BYD has expanded rapidly in the sector. On July 26, BYD announced that it would buy 100 percent of Hunan Midea Coach for 60 million yuan, signaling plans to expand into the alternative-fuel bus market. The company also plans to build a plant in Changsha, the capital city of Hunan province, intending to produce up to 400,000 alternative-energy-powered buses and coaches per year.
With new models and an increase in exports, the Shenzhen-based company said it aims to more than double vehicle sales this year to 400,000. According to the China Association of Automobile Manufacturers, BYD's first-half sales more than doubled to 176,814.
1 yuan = 14 U.S.cents
Full article in Chinese: http://www.caijing.com.cn/2009-07-31/110218956.html