Dec. 17 (Bloomberg) -- Geely Automobile Holdings Ltd., whose parent bought Volvo Cars in 2010, will set up a financing venture with BNP Paribas SA’s personal finance unit as it joins rivals in China in providing funding for car buyers.
Geely will contribute 80 percent of the joint venture’s 900 million yuan ($148 million) in registered capital, with BNP Paribas contributing the balance, according to a Hong Kong stock exchange filing yesterday.
Most Chinese automakers have or are planning to set up vehicle-financing units, Geely said, adding that providing financing will help the company promote sales of Volvo passenger vehicles in the country.
While the Hong Kong-based carmaker will appoint four of the JV’s five directors, some “key corporate matters” will require BNP Paribas’ approval or unanimous consent of all the directors, Geely said.
BNP Paribas has a call option to boost its stake in the company to 50 percent and a put option to dispose of its entire holding, Geely said. The automaker said it has a call option to buy BNP Paribas’ stake.
BNP Paribas, France’s biggest lender, is hiring about 1,300 people over three years at its corporate- and investment-banking and investment solutions businesses in the Asia-Pacific region. The Paris-based bank foresees annual revenue growth of 12 percent through 2016 in Asia, it said in February.
In China, BNP Paribas has about 500 employees and it provides banking, financing and advisory services for clients, according to its website. BNP Paribas also owns about a 14.7 percent stake in Bank of Nanjing Co., according to Bloomberg data. Its insurance unit BNP Paribas Cardif in July agreed to buy ING Groep NV’s 50 percent stake in a life-insurance joint-venture with Bank of Beijing.
To contact the reporter on this story: Joshua Fellman in New York at email@example.com
To contact the editor responsible for this story: Young-Sam Cho at firstname.lastname@example.org