Business / Auto China

BYD denies Buffett plans to cut stake

By Dai Tian ( Updated: 2014-12-19 11:16

Chinese electric carmaker BYD, whose shares tumbled 29 percent on Thursday, said shareholder Berkshire Hathaway Inc had confirmed it has no present intention to reduce its stake in the company.

Warren Buffett, chairman of Berkshire Hathaway, holds 225 million shares in BYD, according to the Hong Kong Stock Exchange.

The automaker also stated in a conference call that business operations are normal and that the company has no substantial exchange losses as the value of products exported to Russia is less than $1 million.

The level of support from the Chinese government towards renewable energy vehicles, including plug-in hybrid ones, hasn't changed substantially, the company said.

BYD's H shares fell 29 percent to close at HK$25.05 ($3.23) on Thursday, after sliding as much as 47 percent. The value of equities changing hands surged to HK$6.04 billion. Its Shenzhen-traded shares slumped by the daily limit of 10 percent.

The automaker also dismissed rumors that chairman and founder Wang Chuanfu had been arrested saying he was working normally.

BYD added that it was not in a position to confirm or deny rumors that certain investors have incurred losses in margin trading and had to sell shares.

"BYD's fast growth mainly benefits from government subsidies. As the subsidy is expected to last three years, there's uncertainty about its continuation," said Chen Shi, analyst with UBS Securities, in a note on Thursday.

BYD rebounded 3 percent to 37.55 yuan in A-share and soared 29.5 percent to HK $29.5 in Hong Kong as of 1 pm.

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