Date: Mon Oct 29 00:12:43 2007

UPDATE: Chongqing Lifan Plans More Than CNY1B IPO - Chairman

BEIJING (Dow Jones)--Chongqing Lifan Industry (Group) Co. plans to raise more than CNY1 billion in an initial public offering and is considering issuing corporate bonds to finance its car business, Chairman Yin Mingshan said at the China Europe International Business School's (CEIBS)  5th Annual China  Automotive Industry Forum 2007 on Monday Oct.29. 

Yin said Lifan is likely to list A-shares domestically, as the mainland securities regulator encourages companies to do so, although Lifan earlier considered listing in Hong Kong instead. But he said no final decision has been made yet.

Lifan's IPO is unlikely to happen before the end of this year because the company is still undergoing an audit and hasn't yet submitted an IPO application, he told reporters on the sidelines of the 5th Annual China Automotive Industry Forum in Shanghai.

Lifan, one of China's homegrown car makers, is also planning to issue corporate bonds under the guidance of the Chongqing municipal government, said Yin. He didn't elaborate.

Meanwhile, Lifan is likely to get unspecified amount of loans from China's two policy lenders, which will bring the total amount of funds it hopes to raise, including through the IPO and bond issue, to CNY4.5 billion by 2015 to support its car business, Yin said.

The company plans to raise its annual car output at least ten times to 400,000-500,000 units by 2015 from an expected output of 40,000 units this year, he said.

"The car business is expected to swing to a net profit of between CNY80 million and CNY100 million this year," said Yin. He didn't provide comparison figures.

Lifan, one of China's largest private companies, began production of the Lifan 520 and Lifan 620 cars at its Russia assembly in August, Yin said.

The company, with its operation initially focused on motorcycle production, extended its business scope to passenger car manufacturing after the debut of the Lifan 520 car in January last year.

-Sun Yan contributed to this story, Dow Jones Newswires; 8610 6588-5848; yan.sun@dowjones.com