Financial Daily from THE HINDU group of publications
Thursday, Feb 28, 2002
Money & Banking
Mergers & Acquisitions
GEC to buy out HDFC stake in GE Countrywide
NEW DELHI, Feb. 27
THE US-based General Electric Corporation (GEC) has decided to buy out the 25 per cent stake of its joint venture partner, HDFC, in GE Countrywide Consumer Financial Services Ltd.
The buy-out will be carried out through GEC's wholly-owned Indian subsidiary GE Capital Services India.
GE Capital Services will acquire over 83 lakh equity shares of Rs 10 each currently held by HDFC Ltd for a consideration of Rs 8.34 crore.
Following the acquisition, GE Countrywide will become a 100 per cent subsidiary of GE Capital Services.
The move is aimed at strengthening the company's position in the Indian non-banking financial sector.
GE Countrywide has 33 branches and a 3,500-strong network of dealers in the country.
GE Countrywide already meets the minimum capital requirement norms prescribed for 100 per cent foreign equity participation in an NBFC.
The company has received foreign equity share capital to the extent of $97.4 million as against the minimum requirement of $50 million.
The Foreign Investment Promotion Board (FIPB) recently approved the buy out of HDFC's stake by GE Capital Services.
The proposed increase in foreign equity would provide value-added financial services and improve the quality of service to the customers, according to sources.
GE Countrywide was set up in the mid-1990s with the objective of providing easy personal finance.
It has tie-ups with leading manufacturers and finances a range of white goods, brown goods, office equipment, two-wheelers, used cars, furniture, jewellery and travel loans.
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