Geely to issue HK$2.59 bln in bonds, warrants to Goldman Sachs

Sep. 23, 2009 (China Knowledge) - Geely Automobile Holdings Ltd<0175>, China's 10th-largest auto maker, Wednesday confirmed that it will raise HK$2.59 billion by issuing convertible bonds and warrants to GS Capital Partners VI Fund L.P., an affiliate of Goldman Sachs Group Inc, Reuters reported.

Goldman Sachs would hold a 15.1% stake in Geely if it were to fully convert the bonds and warrants, said the Chinese company.

Proceeds from the fund-raising will be used to fund capital expenditure and potential acquisitions, as well as to replenish general working capital, Hong Kong-listed Geely said in a statement.

Earlier this month, Geely said its parent, Geely Holding Group, may team up with a state-owned investment company on a bid for Ford Motor Corp's Volvo unit. The deal, if successful, could help Geely boost its profile and give it access to Volvo technology.

Hangzhou-based Geely sold 185,000 vehicles in the first eight months of the year, representing a year-on-year growth of 35%. It aims to sell 250,000 vehicles in 2009.

Shares of Geely opened up 26% to a record high of HK$2.25 on Wednesday, resuming trading after suspension last week.