(Yicai Global) Dec. 6 -- BAIC Motor and Daimler China will raise their investment in Mercedes-Benz Leasing based on their respective holdings in a combined amount of CNY500 million (USD72 million).
This transfusion, the parties' sixth such added investment, is needed to fuel the joint venture's swift growth and to satisfy the administrative requirements of China's commerce ministry, Beijing-based BAIC announced yesterday.
Financial leasing companies' risk assets may not exceed ten times their total net assets, per ministry regulations. The JV's risk assets continue to burgeon and so they urgently need to replenish its registered capital, according to the announcement.
The China unit of the Stuttgart, Baden-Württemberg-based German auto giant will pump in CNY325 million for 65 percent of this investment round, while BAIC will siphon in the rest for CNY175 million, which will endow the Beijing-based JV with about CNY4.8 billion (USD680 million) in registered capital.
The car leasing unit had CNY50.87 billion in total assets as of the third quarter. Its net profit after deducting taxes and non-recurring items was CNY297 million, CNY450 million and CNY690 million in the same periods in 2017, last year and this year, respectively, with annual growth rates exceeding 50 percent in the past three years, per the announcement.
The announcement did not specify the JV's net assets.
Editor: Ben Armour