China's Far East Golden seeks 66 bil. yuan for hybrid-car project

Three China-listed companies have agreed to back the plan, and Far East is also in talks with private-equity firms, Yeung, also known as Yang Rong, told reporters in Hong Kong Monday by video-conference from the United States. The company will soon name the three listed backers, he said, without elaboration.

Far East plans to begin making hybrid cars as China supports alternative-energy vehicles to pare oil imports and reduce pollution. The company has announced plans for a possible 20 billion yuan investment in Shenyang, China and for a US$7.8 billion project in the U.S. state of Alabama.

A third of the funding for the Chinese hybrid-car venture may come from private-equity investors, said Yeung. Far East will supply technology and management to the project and charge as much as US$500 in licensing fees for each hybrid car sold, he said.

The company last week said it signed a memorandum of understanding to build a 10 billion yuan facility for making hybrid vehicle engines, transmissions and motors in the Shenyang-EU special economic zone. The planned plant will be able to make 1 million packs per year, according to a statement.

The company also said it's considering building a 10 billion yuan factory for making 1 million cars a year in the same zone, located in northeast China.

Far East's hybrid-car project in Alabama may begin production as early as next year, Chief Financial Officer Wilson Hui said. The company said in September that it formed a partnership that will seek investors to put up a minimum of US$500,000 for shares to be sold in a private placement.

Yeung, the former chairman of Brilliance China Automotive Holdings Ltd., said he may return to China on business related to the project. He didn't elaborate. Yeung fled to the U.S. after the government accused him of economic crimes.

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