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Czech finance giant heralds partnership with HK firm

By Fu Jing in Prague | chinadaily.com.cn | Updated: 2017-07-19 03:07

Home Credit Group, the financial giant from the Czech Republicthat employs more than 80,000 Chinese staff, will receive 2 billion yuan ($296.5 million) "immediately" from PAG Asia Capital, a Hong Kong-based private equity firm, said the group's top management.

The cooperation is aimed at ensuring Home Credit Group's China operation will eventually be listed on the stock market.

Jiri Smejc, chairman of Home Credit Group, made the announcement in Prague, where the China Investment Forum, with the theme of promoting the Belt and Road Initiative, was kicked off on Tuesday by Liu Yunshan, a member of the Standing Committee of the Political Bureau of the CPC Central Committee. He was joined by Czech Republic Prime Minister Bohuslav Sobotka.

The two companies signed the cooperation agreement on Tuesday. It will allow Home Credit Group to accelerate its pace of localization by seeking Chinese shareholders after having had a presence in China for up to 10 years.

It is expected that it will take another three to five years to complete the process of gaining approval from regulatory bodies that will make PAG become the group's shareholder in China.

Smejc said his group's partnership with PAG has showcased its confidence in the stability and promising prospects of China's financial market. He added that China's regulatory bodies have made tremendous efforts to beef up the robust market in previous years.

The registered capital of the Home Credit Group's operations in China amounted to 7 billion yuan and the new input will make PAG a minority shareholder.

"The investment will be in place immediately," Smejc said before the signing ceremony on Tuesday.

He said the partnership was finalized after two years of negotiations andexplained that his group had been trying to identify "qualified" local partners and investors for some time.

"This is a very big and strategic decision for us, which has showcased our confidence and commitment to this dynamic market," he said.

Shan Weijian, chairman of PAG Group, an alternative investment management firm, said: "We are very pleased to form a partnership with one of the world's most innovative consumer finance providers."

Shan said his company will contribute its knowledge in the China market to help Home Credit Group further grow and better serve its customers, while both entities have set a goal of "eventually listing Home Credit Group's China operations on an internationally recognized stock market," after all necessary regulatory approvals.

According to their agreement, both sides have committed to help develop a healthy consumer finance sector in China, recognizing the sector's great potential.

Home Credit Group said partnering with PAG will enable it to open a dialogue with additional local partners regarding strategic cooperation and investment.

Smejc said China is his group's largest and fastest-growing market, with 7.5 billion euros of total assets and more than 13.2 million active customers as of the end of March. It has 178,00points of saleacross the country.

Thanks its success in China, Smejc said his company is also the biggest consumer finance provider in several countries in Asia,but not in India.

"But very soon, we will be the most competitive one in that country as well," said Smejc, who added that his company mainly offers small loans to individual borrowers.

fujing@chinadaily.com.cn

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