Buffett to bump up stakes in BYD
Updated: 2008-09-30 07:22
By Joey Kwok(HK Edition)
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MidAmercian Energy, a subsidiary of Warren Buffett's Berkshire Hathaway Inc, said it will consider increasing its stake in mainland-based BYD if it can benefit the development of the battery and car maker.
On Sept 27, MidAmerican Energy announced that it will pay HK$1.8 billion for a 10 percent stake in BYD.
David Sokol, chairman of MidAmerican Energy, said the company may expand its investment in BYD, the largest maker of rechargeable batteries on the mainland, due to strong economic growth in China.
MidAmerican Energy will continue to search for other acquisition opportunities on the mainland, Sokol told reporters in a news conference in Hong Kong.
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David Sokol (left), chairman of MidAmerican Energy Holding Company, shakes hand with Wang Chuanfu, president of BYD Company Limited, during the joint press conference yesterday. AP |
"We hope the right opportunity will come later on," said Sokol, adding that the company expects to hold BYD's shares for long-term, for instance, 20 to 30 years.
Meanwhile, Sokol will be a non-executive director of BYD pursuant to the strategic investment and share subscription.
Talking about purchasing BYD's shares, Sokol said the Shenzhen-based battery manufacturer is capable of turning research development into actual products.
"As worldwide discussions over global climate change and environmental well-being continue, the technologies being developed by BYD will be an integral part of the future," Sokol said, adding that Buffett has not changed his investment strategy and the 78-year-old billionaire is still keen on investing in the "game-changing" company.
BYD, which also makes automobiles, plans to launch fuel/electric hybrid vehicles in November and December this year, while the company will market its electric vehicles by the end of 2009.
Wang Chuanfu, chairman of BYD, said MidAmerican's investment helps bring its electric vehicles to the North-American market.
"Developing our electric vehicles requires a lot of energy, which MidAmerican Energy can supply us in the future," Wang said.
The sales of automobiles have been accounting for 30 percent of BYD's total turnover this year and Wang said the development and marketing of automobiles will speed up after MidAmerican has joined.
Concerning the company's lawsuit filed by Foxconn International for allegedly stealing trade secrets, Wang said: "BYD has not stolen any companies' business secrets and we believe that the law will be impartial." Meanwhile, trading of BYD shares was suspended in the morning session yesterday, and then leapt to a record-high of HK$16 during the after-lunch session on the stake purchase news.
The stock finally ended the day up by 41.67 percent, or HK$3.5, to HK$11.9.
Its wireless handset affiliate BYD Electronic also soared 21.26 percent, or HK$0.37, yesterday.
Trading of the shares was also suspended for two hours during the morning session, followed by a mighty surge of almost 72 percent in just one hour after the stock market reopened in the afternoon.
(HK Edition 09/30/2008 page2)