China's Commerce Ministry has not rejected heavy equipment maker Tengzhong's planned purchase of GM's GM.UL Hummer unit, but has asked for more information on the deal, a source familiar with the matter said on Tuesday.

Legal Evening News, a semi-official newspaper, reported on Monday that the ministry had turned back Tengzhong's application for the deal because it was lacking in detail.

Sichuan Tengzhong Heavy Industrial Machinery, a little-known Chinese firm, raised eyebrows when it unveiled plans three months ago to take over the Hummer brand.

The ministry has requested more details and clarifications on the terms of the deal after receiving Tengzhong's application. But it has by no means rejected the case, the source close to the company told Reuters.

A Tengzhong spokeswoman said the Legal Evening News had never contacted the company for comment, and had promised to remove the article from its website.

She added that Tengzhong was in no position to comment on regulatory approval for the deal, but talks to buy Hummer were moving forward.

Chinese regulators will decide whether to approve the plans after the deal is finalized, the source added.

Major Chinese auto companies, including its biggest, SAIC Motor Corp (600104.SS), have attempted several overseas acquisitions in recent years with mixed results.

GM and Tengzhong have said they will not disclose the financial terms of the deal.

Bankers familiar with the situation have said Hummer could fetch about $100 million in cash in addition to other commitments -- far less than the $500 million GM had expected Hummer to bring when it went on sale in June 2008.

(Reporting by Fang Yan and Doug Young)

(Editing by Ian Geoghegan)

China