Chinese carmaker Nanjing Automobile Corp. (NAC) has refuted media reports that claimed the company had applied for a loan of two to three billion yuan (256 million to 385 million U.S. dollars) from the central government, Wednesday's Shanghai Securities News reports.
Speaking as NAC launched its new MG range, General Manager Yu Jianwei said, "NAC has no fund shortage of two to three billion yuan."
A report earlier this month by the same newspaper claimed that NAC, with some subsidiaries in the red, was turning to the National People's Congress (NPC) for financial assistance.
But Yu said he knew "little about the company seeking policy support for a loan worth two to three billion yuan" to fund its MG project.
"The project has a registered capital of 1.8 billion yuan, equivalent to 51 percent of the total investment, which is much higher than the 25 percent to 30 percent in similar projects," said Yu.
He said the project, which aims to produce 200,000 vehicles, 250,000 engines and 100,000 gearboxes every year, would receive more investment from its own sales income.
However, Yu did admit the NAC would need more than three billion yuan in the long run to boost the development of the project. So far, it has received a loan offer of 500 million yuan from the Import and Export Bank of China.
In 2005, NAC outbid China's biggest automaker, Shanghai Automotive Industrial Corp., to acquire the bankrupt British carmaker MG Rover Group and its engine producer, Power Train Ltd, for 53 million pounds.
The company has announced it will build the MG-brand car in Oklahoma from May 2008, making it the first Chinese carmaker to manufacture in the United States.
NAC, founded as a military garage 60 years ago, produced China's first light-duty truck in 1958 and became a joint venture partner with Italian carmaker Fiat in 1999.