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American International Group Inc. (AIG) has received approval from China's Ministry of Commerce to buy a 13.5% stake in Chongqing Lifan Industry (Group) Co. for US$90 million, the Chinese homegrown car maker said Tuesday.
The proceeds will help Lifan expand overseas and develop its auto, engine and motorcycle operations, said Chen Rong, a spokeswoman at Lifan.
Lifan started talks on the stake sale with AIG in August and the two companies signed a letter of intent in December, Lifan said on its Web site.
The move by AIG comes at a time when Lifan and its subsidiary Bank of Chongqing Co. are preparing initial public offerings on the domestic stock market.
Lifan Chairman Yin Mingshan said in October that the company intends to raise at least CNY1 billion on the A-share market. Lifan hasn't submitted an application to the China Securities Regulatory Commission for the planned listing, Chen said Tuesday.
Bank of Chongqing, a city commercial lender in which Lifan owns an 8% stake, has asked the securities regulator to approve its domestic listing, though the timing and the size of the IPO haven't been disclosed.
In addition, Lifan holds 22 million shares, or less than 0.1%, of China Everbright Bank Co., which will likely list CNY20 billion worth of new shares on the Shanghai stock exchange later this year.
Chongqing Lifan earlier said it will expand its annual car output to 400,000- 500,000 units by the end of 2015, more than ten times its production of around 40,000 units last year.
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