World Business Quick Take

Agencies

Fri, Jun 24, 2011 - Page 10

RETAIL

Prada sets IPO at low end

Italian fashion house Prada SpA has set its Hong Kong initial public offering price (IPO) at HK$39.50. The pricing is at the low end of the range, underscoring investors’ wariness of stocks amid a global market slump. Yesterday’s statement confirms an Asoociated Press report last week, which cited a source close to the deal who declined to be identified. Prada is selling 423.3 million shares to raise roughly HK$16.7 billion (US$2.1 billion). Hong Kong individual investors are getting 5 percent of shares, half the proportion they usually get. That’s an indication that local investors, who normally play a big role in initial public offerings, have been turned off by the possibility they may have to pay Italian taxes.

AUTOMAKERS

BYD IPO oversubscribed

BYD Co (比亞迪), the Chinese carmaker backed by Warren Buffett, said the online tranche of shares in its IPO in Shenzhen was 21 times oversubscribed. Demand from institutional investors made the so-called offline tranche 3.9 times oversubscribed, the Shenzhen-based company said in a separate stock exchange filing yesterday. BYD, which wants to raise 1.35 billion yuan (US$209 million) in net proceeds after deducting issuance fees, plans to use part of the money to expand its vehicle lineup and for research and development. The maker of automobiles and batteries will sell a combined 79 million shares at 18 yuan each, it said on Sunday.

INSURANCE

Aviva to sell RAC

Aviva is to sell its RAC roadside rescue business to private equity firm The Carlyle Group for £1 billion (US$1.6 billion), as the British group continues scaling back from non-core areas to focus on its insurance operations. Aviva said yesterday it expected an accounting profit of £600 million from the sale of Britain’s second-largest breakdown recovery group and would use the proceeds to strengthen its balance sheet and invest in its main markets. Aviva has been trying to boost profit by concentrating on 12 markets where it makes most money. As part of its plan, the company has walked away from less profitable businesses in Italy and the US.

AUTOMAKERS

Saab employees unpaid

Swedish automaker Saab cannot pay its 3,800 employees their wages for lack of “short-term funding,” the Dutch parent company Swedish Automobile, formerly known as Spyker, said yesterday. Saab, which has based its funding strategy on tie-ups in China, had announced on June 13 a partnership with two Chinese businesses which was to generate investment of 245 million euros (US$350 million). However, production at the Saab factory at Trollhattan in Sweden has been at a standstill since June 8. On Monday, management told workers on the assembly lines that they should not come to work before July 4.

CHINA

Preliminary PMI shows fall

Growth in China’s manufacturing activity fell to an 11-month low last month, preliminary HSBC data released yesterday showed, as Beijing’s efforts to cool the red-hot economy continued to bite. HSBC’s preliminary purchasing managers index (PMI) fell to 50.1 last month from a final reading of 51.6 in May. A reading above 50 indicates the sector is expanding, while a reading below 50 indicates contraction. “Demand is cooling thanks to the effect of tightening measures and the slackness in external markets,” HSBC said. The final PMI reading will be released next week.