Business And Markets

Saipa Shares on Sale to Secure Project Financing

Saipa Shares on Sale to Secure Project Financing
Saipa Shares on Sale to Secure Project Financing

Iranian carmaker Saipa is putting 20 percent of its shares, 'Vaspa' (Saipa)  and 'Khpars' (Pars Khodro), on sale to finance new projects.

A wide variety of Iranian and foreign customers, including French giant Renault, are among the candidates vying for Saipa shares, Hossein Amiri, the company's financial manager told Bourse News Sunday.

Saipa started making drastic changes to the company by increasing its financial resources, first through selling lands and buildings, and now by offering Saipa and Pars Khodro shares, a total 40 percent of equity market," Amiri stated.

Saipa Group and Pars Khodro are among leading car manufacturers in Iran. The car industry in line with other industries is suffering from illiquidity problems.

Amiri added that negotiations are on the way with respective counterparts for the announced share sale. Among the Iranian and foreign investors, Renault – the car manufacturer—enjoys a greater chance to collaborate with Saipa.

Saipa's strategy is to contribute with the potential investor and the negotiations are being conducted based on this goal to attain bilateral cooperation, which will lead to further development of Saipa.

It has been said that the ultimate investor has not been determined yet and the final decision would be dependent to the market situation and sales of the company, Amiri added.

He also highlighted Saipa's new products including 'Tiba 2' hatchback, which has been distributed to the market adding that another car, the Kia Cerato is in technical tests. Cerato mass production will be launched in the near future.

Speaking on new products, he indicated that required machinery to initiate production of the new 'B90' is about to be installed, while its mass production is subject to the removal of international sanctions.

Self financing is Saipa's strategic plan as its first phase is already done. The second phase plans to raise capital via existing shareholders of up to 75 percent. Currently, it has not been implemented, while its report will be handed to the Securities and Exchange Organization by the end of month, started at Aug 23.