Thu, Nov 25, 2004 - Page 11 News List

Yulon Motor to sell shares in distribution unit soon

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Yulon Motor Co (裕隆汽車), which makes Nissan Motor Co cars in Taiwan, said it will sell shares of its distribution unit in an initial public offering next month.

Yulon Nissan Motor Co (裕隆 日產) plans to list its shares on the Taiwan Stock Exchange on Dec. 21, Hsu Shih-tung (徐世棟), general manager of the company's finance department said in an interview.

Yulon Motor, the second-largest automaker in Taiwan by market value, sought to separate production and marketing by setting up Yulon Nissan Motor in October last year in an effort to win other carmakers as customers.

On Oct. 1 the company said profit this year may fall 40 percent to NT$4.6 billion (US$141.8 million) this year.

Sales may increase 6 percent from last year to NT$39.6 billion.

"The spin off will turn Yulon Motor into a pure contract manufacturer, allowing it to make cars other than for Nissan," Hsu said.

"The new company can also benefit as Yulon Motor can cut its production costs by expanding its production scale to include others,'' he said.

Yulon Motor offered 7.5 million Yulon Nissan shares, or a 2.5 percent stake, at NT$80 each to Taiwanese investors yesterday. The sale was aimed at diversifing its shareholdings as part of a requirement by the Taiwan Stock Exchange before listing, Hsu said.

Yulon Motor will hold 50 percent of the company while Nissan will own 40 percent after the sale.

The remaining 7.5 percent will be owned by workers, management and units of Yulon Motor.

Yulon is in talks with Renault to manufacture cars here, Han Chen-ping (韓正平), a spokesman for Yulon said in September.

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