BEIJING -- Daimler's electric car partner in China, BYD Co., won regulatory approval for a share sale on the Shenzhen exchange to fund its expansion in the world's biggest vehicle market.
The China Securities Regulatory Commission approved the planned A share issue, according to a statement posted on its Web site Monday.
Hong Kong-listed BYD awaits written approval and will announce details of its Shenzhen offering later, according to a Hong Kong stock exchange filing Monday.
BYD plans to offer as many as 79 million shares in Shenzhen, where the company is based, according to a May 5 statement to the Hong Kong stock exchange.
The Chinese automaker said it will use the proceeds to develop its auto and rechargeable-batteries businesses, and to expand into car products and accessories.
"BYD has urgent demand for capital to fuel its expansion," said Zhang Xin, a Beijing-based analyst with Guotai Junan Securities Co. "With sales plunging, IPO pricing will be a key to make BYD attractive to investors."
Last May, BYD and Daimler signed a joint venture contract to develop EVs in China through a 50:50 research firm called Shenzhen BYD Daimler New Technology Co. Ltd.
BYD's vehicle sales fell for nine straight months through April amid rising competition from rivals General Motors Co., Volkswagen AG and Nissan Motor Co.
MidAmerican Energy Holdings Co., a unit of Warren Buffett's Berkshire Hathaway Inc., bought 9.9 percent of BYD in September 2008.
The carmaker raised HK$1.4 billion ($180 million) in an initial public offering in Hong Kong in July 2002 by selling shares at HK$10.95 each. The stock has declined 60 percent in the past year, closing at HK$28.20 on Monday.
Source: Bloomberg with contributions from Douglas A. Bolduc