Chinese machinery maker Sany Heavy Industry Co will sign a memorandum of understanding with the U.S. state of Georgia on Wednesday to build a $60 million plant, a source familiar with the situation said on Tuesday.
Sany, a private-sector manufacturer based in the central Chinese province of Hunan, last year won initial Chinese government approval to build a plant in the United States, potentially becoming the first Chinese company to make construction equipment in North America.
The firm has acquired a site near Atlanta for the facility, where it would assemble equipment for the U.S. market, Xiang Wenbo, Sany's executive vice president, said in June.
But the project is still pending final Chinese regulatory approval and construction is unlikely to begin before next year, said the source, who asked not to be identified.
It could take months to get the final nod from various government bodies including the foreign exchange administration, the source said.
Sany has said it would fund the U.S. plant mostly from its own resources but had secured regulatory approval to place up to 50 million new A-shares with select institutional investors.
Its A shares, traded on the Shanghai Stock Exchange, were down 3.86 percent at 48.55 yuan in late trade on Tuesday, compared with a 2.35 percent slip in the benchmark index.
They have jumped 480 percent since executives at the company told Reuters in mid-October it was planning to build the U.S. plant.
The gain was also linked to U.S. private equity firm Carlyle's bid for Xugong Group Construction Machinery Co, China's largest construction equipment maker, which highlighted the value of the sector, analysts said.