| China Sichuan Tengzhong's plan to buy GM unit still being examined: officials |
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| Monday,June 29,2009 Posted: 13:16 BJT(0516 GMT) |
| From:Xinhua Article type:Reproduced |
CHENGDU, June 29 (Xinhua) -- Authorities in southwest China's Sichuan Province confirmed Monday that Tengzhong company's plan to buy General Motors Corp.'s Hummer unit was still being examined by concerned departments and there had been no definitive result toward approval.
Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. (Tengzhong), a private Chinese firm, struck a preliminary deal with General Motors Corp.(GM) for the premium SUV brand Hummer June 2.
Tengzhong, based in Deyang of Sichuan, clarified one day later via Zhao Xiaolu with Brunswick Group Ltd, which is handling the public relations matters for the Tengzhong deal, that it had no plan to manufacture Hummer in a Chinese plant. The size of the deal has been kept unknown.
The preliminary deal allows Tengzhong to keep the management and operational team along with the Hummer brand, and secure more than 3,000 jobs in the United States. The Chinese buyer will also assume existing dealer agreements relating to Hummer's dealership network.
Tengzhong, however, has to go through other procedures, including getting approval from the Ministry of Commerce and the National Development and Reform Commission (NDRC), before it can finish the deal with GM by the end of the third quarter of this year in accordance with a schedule.
The acquisition plan has drawn unprecedented attention and has even been shrouded in mystery since the plan was announced as Tengzhong executives have been shunning the media.
Speculations vary. Some media reports said NDRC is likely to reject Tengzhong's acquisition plan, citing two reasons -- Tengzhong's lacking the expertise to run Hummer and Hummer gas-guzzling vehicles conflicting with Beijing's conservation goals.
Yan Zhuolin, chief of foreign trade and economy with Sichuan Provincial Commerce Department, said in a phone interview with Xinhua that he hadn't heard of any progress regarding the Chinese Commerce Ministry's approval of Tengzhong's acquisition plan.
Yan emphasized that, given the size of the deal, Tengzhong needed to get approval both from the Ministry of Commerce and the NDRC, which was necessary in accordance with the stipulation of Chinese laws regarding Chinese companies investing overseas.
Sources with the Sichuan Provincial Development and Reform Commission said Monday they did not receive any information on theapproving process of Tengzhong's acquisition plan.
Zhao Xiaolu with Brunswick Group Ltd said Monday she had noticed recent rumors about Tengzhong's acquisition plan, to which Tengzhong would make no comments or response.
"Tengzhong has been cooperating closely with concerned Chinese government departments as required so as to get the approvals done," said Zhao, who refused to disclose more details about the approving process.
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