HONG KONG (Reuters) - A major shareholder of the Chinese company buying General Motors’ GM.UL Hummer brand said on Monday that he hopes the deal can be approved by the Chinese government this spring, paving the way for production of the iconic SUVs in China.
In his first-ever interview with foreign media, Suo Lang Duo Ji, a private entrepreneur cited by Chinese media as the architect of the deal that would see Sichuan Tengzhong Heavy Industry Machinery buy Hummer, also confirmed the price tag of the deal at $150 million.
Suo Lang, who is also chairman of Chinese chemical maker Lumena Resources Corp (0067.HK), said he and an associate would pay $30 million and hold 20 percent of the new company after the deal closed.
Tengzhong, which will hold the remaining 80 percent, said on Monday that it and GM GM.UL had agreed to push back the deadline for the acquisition from January 31 to the end of February as they seek approval from Chinese regulators.
Hummer had a far higher intrinsic value than many people realized, Suo Lang, a Sichuan native sporting a black leather jacket, told Reuters in an interview at Lumina’s Hong Kong office, overlooking Victoria Harbour. “It’s the king of off-road vehicles,” he said. “It’s especially suitable for China, where natural disasters happen often.”
Tengzhong, a little-known machinery maker in southwest China’s Sichuan province, has applied to the government for approval of the deal. Suo Lang’s connection to the Sichuan company comes from a stake he once held in Tengzhong.
“We hope the deal can be concluded this spring. But it all depends on the government. They have a lot to consider, such as environmental and other issues,” he said.
China’s Ministry of Commerce has authority over the purchase, while the National Development and Reform Commission has to approve any new major investment in the country, such as building a new manufacturing facility.
Tengzhong would also need to get a vehicle-production license from the Ministry of Industry and Information Technology.
Reporting by Joanne Chiu and Alison Leung; Editing by Don Durfee