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Saturday, May 24, 2003

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General Motors to hike stake in finance arm

Ambarish Mukherjee


GENERAL Motors has finalised plans to invest heavily in the Indian automobile financing market. For this, the company has decided to increase its stake in the company's automobile financing subsidiary, GMAC-TCFC Finance Ltd, from the existing 51 per cent to 74.9 per cent.

General Motors holds a 51 per cent stake in the Indian joint venture through its wholly-owned subsidiary, General Motors Acceptance Corporation (GMAC), while the remaining 49 per cent is currently held by TCFC Finance.

According to the company's plan, GMAC will buy out a total of 95,60,000 equity shares of Rs 10 each accounting for 23.9 per cent stake in the company from the Indian partner — TCFC Finance — for a consideration of Rs 9.56 crore, Government sources said.

GMAC is currently the largest motor vehicle financing company in the world operating in 40 countries through more than 700 offices and is currently servicing eight million customers with more than $100 billion owned assets and serviced automobile receivables.

TCFC Finance is an offspring of the erstwhile 20th Century Finance Corporation. 20th Century's retail business was merged with Centurion Bank a few years back while the investment division was hived off into a separate company, TCFC Finance Ltd, and listed on the BSE.

After consolidating its holding in the joint venture outfit, GMAC plans to provide full service leasing, fleet financing and fleet management services, apart from providing financing accommodations to dealers, fleet operators and vehicle rental companies and other retail and corporate customers for financing the purchase of vehicles, sources said.

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