HONG KONG, April 6 BYD Co , backed by
U.S. billionaire Warren Buffett, will restart construction of
buildings in Xi'an city in cental China, the Chinese automaker
said, after it was previously fined by the government for
illegal land use.
Last year, China's Ministry of Land and Resources said it
fined BYD 2.9 million yuan ($434,600) and closed several
buildings on the land the company used illegally in Xi'an in
China's Shaanxi province. [ID:nTOE69C02E]
Chinese officials have now allowed a re-zoning of the land
for industrial use instead of agricultural use, the company said
in a statement seen by Reuters on Wednesday.
BYD would restart construction of the second phase of BYD's
Xi'an plants, which will have an annual production capacity of
more than 700,000 vehicles, it said.
Instead of leasing 112 acres (455,000 square meters) of land
from the Xi'an Economic Development group as in BYD's original
plan, the company was granted acquisition rights to 86 acres for
59 million yuan ($9 million), BYD said.
The buildings and other facilities previously built on the
land has been returned to BYD as part of the acquisition, it
said. BYD was expected to sign the final land grant contract
before April 11.
BYD plans to complete the second phase of expansion and has
already started recruiting employees for training, creating up
to an additional 70,000 job opportunities.
Shares of BYD, 10 percent owned by Buffett's Berkshire
Hathaway (BRKa.N), have lost nearly 30 percent of their value
this year on concerns that weak auto sales could continue to
hurt the company's profit margin.
(Reporting by Alison Leung; Editing by Jacqueline Wong)