Shanghai Bashi to become vehicle for SAIC group

SHANGHAI, June 2 (Reuters) - Bus service provider Shanghai Bashi Industrial (Group) Co said on Monday it would divest its public transport assets and become a stock market listing vehicle for the SAIC group, China's biggest auto conglomerate.

In a brief statement, Shanghai Bashi (600741.SS) said the Shanghai municipal government, which controls both it and the SAIC group, had approved the plan.

It did not elaborate, but the official Shanghai Securities News quoted unnamed company sources as saying the SAIC group would inject its auto parts making assets, valued at roughly 10 billion yuan ($1.4 billion), into Shanghai Bashi.

SAIC has been listing assets to improve its access to funding, as rapid expansion and acquisitions build it into a Chinese national car champion.

In late 2006 the group injected major car making assets into its listed arm SAIC Motor Corp (600104.SS) through a $2.4 billion deal, and SAIC Motor is now in the process of taking over engine maker Shanghai Diesel Engine (600841.SS). Late last year the SAIC group announced a merger with Nanjing Automobile Co. ($1=6.940 Yuan) (Reporting by Fang Yan; Edited by Andrew Torchia)