China's biggest automaker, Chery Automobile Co, said Wednesday that it has raised 2.9 billion yuan from local private-equity investors to boost its development and expansion plans.

"The capital will be used in our clean energy program, heavy-duty program and a new sedan plant we are planning to build," said Jin Yibo, Chery's spokesman.

The investors, all local funds, include Bohai Industrial Investment Fund Management, which is majority owned by Bank of China; Tianjin-based CDH Investments; China Huarong Asset Management Corp; and Shenzhen-based China Science & Merchants Venture Capital Management Co Ltd, according to Chery's statement.

The deal was finalized over the past few months.

The Wall Street Journal reported yesterday that Chery raised the capital by selling 20 percent stake to the investors. Jin refused to comment on the stake transfer.

"Chery wants to be listed among the world's top 10 automakers in future. Therefore, the current industry slowdown, due to the financial crisis, provides Chery with the best opportunity to boost development by raising capital," said Jin.

Yin Tongyao, chairman and general manager of Chery, had said in April that the company had submitted the necessary documents to the China Securities Regulatory Commission for an A-share listing in Shanghai. He did not reveal the timeframe for Chery's planned float and how much it aimed to raise.

But, analysts said, it might take time as many domestic automakers such as FAW Group Corp and Guangzhou Automobile Group Corp are still queuing up for a full listing.

Last December, Chery also signed an agreement with policy lender Export-Import Bank of China for 10 billion yuan worth of loans that would be used for overseas expansion.

Chery sold more than 140,000 vehicles in the first four months of this year. Sales in April jumped 30.5 percent to a monthly record of 42,935 units, accounting for 11.45 percent of the total local brand passenger cars sold.

The company aims to sell 419,000 vehicles in 2009, compared with sales of 356,000 units last year.

It unveiled two new high-end brands, Riich and Rely at the Shanghai auto show in April. Yin said he believed that Chery had the ability to develop luxury cars.

(China Daily June 4, 2009)