Sany Heavy Industry to Spend USD569 Million on Auto Finance Affiliate
Tang Shihua
DATE:  Dec 13 2019
/ SOURCE:  yicai
Sany Heavy Industry to Spend USD569 Million on Auto Finance Affiliate Sany Heavy Industry to Spend USD569 Million on Auto Finance Affiliate

(Yicai Global) Dec. 12 -- Sany Heavy Industry, China's largest engineering machinery manufacturer, plans to spend CNY4 billion (USD569 million) to buy a majority stake in an affiliated auto finance firm as it looks to become more profitable through service offerings.

The Beijing-based firm plans to buy more than 91.4 percent of equity in Sany Auto Finance from its controlling shareholder Sany Group, Sany Heavy Industry said in a statement yesterday. The buyer already owns a 3 percent stake and believes the purchase will make it more competitive through the combination of manufacturing and services.

Investors were skeptical of the move, with shares [SHA:600031] slipping 2.9 percent to CNY15.61 (USD2.22) when the markets closed at 3 p.m. The Shanghai benchmark slid 0.3 percent.

The target company, founded 2010, is one of just 25 automotive financing companies in China. It was the first to service the construction machinery industry, offering loans to sector plays looking to invest in new equipment.

As part of the deal, Sany Group is acting as guarantor for Sany Auto Finance's CNY9.1 billion in receivables. If the debtors fail to pay up their dues,  the group will cover the loss.

Editor: James Boynton

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Keywords:   Assets Acquisition,Construction Machinery,Auto Financing Service