March 3, 2022
Aditi Shah and Aditya Kalra
NEW DELHI (Reuters) – MG Motor India, owned by China’s SAIC Motor, plans to raise funds to develop its Indian business in electric mobility, three sources told Reuters as Chinese investment faces tighter government control in New Delhi.
MG Motor India may try to sell a stake of 10% to 30% and is considering options including issuing new shares or diluting SAIC shares, said one source familiar with the plans, adding that it could even set up a separate unit for its electrical business vehicles (EV) in India.
According to two sources, the company is talking to private equity funds, which are increasingly interested in investing in the fast-growing electric vehicle market as countries divert their economies from fossil fuels.
“Everyone is buying into the history of EV because it gives investors a bet on ESG, and MG is trying to expose itself as an EV game,” a first source told Reuters.
MG Motor India has not yet determined how much money it plans to raise, which will depend on the assessment of Indian business and its growth plans, – say sources who asked to remain anonymous because the talks are private.
The company plans to use these funds to increase production, introduce new EVs and expand its charging network, a first source said.
MG Motor India declined to comment on the plans.
SAIC also declined to comment, but said it was confident MG Motor India would come to a standstill next year.
He also said he already has an extensive portfolio of new energy vehicles (NEVs) that include electric, hybrid cars and fuel cell cars that MG can opt for for sale in India.
“Local authorities are concerned about the environment and want to promote NEV, so the goal of our Indian company is also in this direction, even 100% use of NEV,” a spokesman for SAIC’s public relations department told Reuters.
Despite government subsidies, sales of electric vehicles in India account for less than 1% of total mainly due to the high cost of EVs and insufficient charging infrastructure.
India’s EV market is dominated by domestic carmaker Tata Motors, which raised $ 1 billion from TPG last year for its electrical engineering business.
Meanwhile, Tesla Inc wants New Delhi to reduce import tariffs on EVs, which reach 100%, so that it can put cars up for sale at an affordable level.
MG Motor India’s fundraising plans appear when New Delhi tries to limit investment from Beijing after the 2020 clash between soldiers of the two countries on their disputed Himalayan border.
Investment proposals worth more than $ 2 billion from China, including from SAIC, are awaiting approval from the Indian government.
SAIC said its business was not affected and that its investment proposal was “being processed”.
MG entered India in 2019 with plans to invest about $ 650 million. It currently sells four models, including the ZS EV, and is working with companies, including Tata Power and Fortum, a European energy company, to build charging stations.
She has hired an Indian law firm and a transaction consultant to raise funds, a second source said.
Delays in raising capital from SAIC, supply chain disruptions and semiconductor shortages have prevented MG Motor India from boosting production, a fourth source said.
The Chinese automaker sold an average of about 3,500 cars in India in 2021 a month, giving it a market share of about 1%, industry data show.
(Report by Oditi Shah and Oditi Kalra in New Delhi; additional reports by Brandi Go in Shanghai; edited by Alexander Smith)
MG Motor India is the exclusive Chinese automaker SAIC to raise funds for EV push-source
Source link MG Motor India is the exclusive Chinese automaker SAIC to raise funds for EV push-source