CRRC leas­ing arm to aid overseas ex­pan­sion

China Daily (Canada) - - VIEWS - By ZHONG­NAN zhong­nan@chi­

China Rail­way Rolling Stock Corp Ltd, the coun­try’s rail­way ve­hi­cle and equip­ment maker and ex­porter, plans to es­tab­lish a leas­ing com­pany to fur­ther as­sist its busi­nesses in man­u­fac­tur­ing and overseas ex­pan­sion.

The com­pany has reached a cap­i­tal con­tri­bu­tion agree­ment with CRRC Group, Bei­jing-based China En­ergy Re­serve and Chem­i­cals Group and Tian­jin Trust Co Ltd to es­tab­lish CRRC Fi­nan­cial Leas­ing Co Ltd, ac­cord­ing to its on­line state­ment posted late on Tues­day.

The new com­pany’s reg­is­tered cap­i­tal will be 3 bil­lion yuan ($437.4 mil­lion), CRRC and its sub­sidiary will hold 70 per­cent of the com­pany’s eq­uity.

The press of­fice of CRRC’s head­quar­ters told China Daily onWed­nes­day that gain­ing the fi­nan­cial li­cense will trans­form the com­pany’s op­er­a­tional model into a more di­ver­si­fied op­er­a­tion that can take full ad­van­tage of the op­por­tu­ni­ties likely to come from the Belt and Road Ini­tia­tive, and sup­port do­mes­tic com­pa­nies’ overseas ex­pan­sion.

The busi­ness scope of CRRC Fi­nan­cial Leas­ing will in­clude fi­nan­cial leas­ing busi­ness, out­ward or in­ward trans­fer of fi­nan­cial leas­ing as­sets, fixed-in­come se­cu­ri­ties in­vest­ment busi­ness, ac­cep­tance of leas­ing de­posits from lessees and in­take of fixed de­posits with ma­tu­rity of three months or above from non-bank share­hold­ers.

In­ter­bank bor­row­ing, bor­row­ing from fi­nan­cial in­sti­tu­tions, off­shore bor­row­ing, leas­ing as­set sale and dis­posal busi­ness, eco­nomic con­sul­tancy and other busi­nesses ap­proved by the China Bank­ing Reg­u­la­tory Com­mis­sion are also in­cluded in its ser­vice cat­e­gories.

Feng Hao, a rail trans­porta­tion re­searcher at the Na­tional De­vel­op­ment and Re­form Com­mis­sion, said: “This move will im­prove the com­pany’s abil­ity to fur­ther com­pete with its for­eign ri­vals, es­pe­cially Ja­panese com­pa­nies, in bid­ding for overseas rail­way-re­lated projects.

“In com­par­i­son with do­mes­tic com­pa­nies, Ja­panese com­pa­nies are pro­fi­cient in form­ing part­ner­ships to par­tic­i­pate in bid­ding, as well as car­ry­ing out fi­nanc­ing, leas­ing and devel­op­ing com­mer­cial busi­nesses such as re­tail or real es­tate at var­i­ous train sta­tions on for­eign rail­way lines. This will be help­ful for them to com­pete with China in gain­ing the right to build the Malaysia-Singapore high-speed rail­way in the fu­ture,” he said.

Ea­ger to di­ver­sify its earn­ing abil­ity, CRRC has been keen to ob­tain fi­nan­cial li­censes over the past two years. It part­nered with a num­ber of State-owned en­ter­prises in­clud­ing China Rail­way Con­struc­tion Corp to es­tab­lish an in­ter­net fi­nance com­pany to sup­port its sup­ply chain fi­nance busi­ness in Novem­ber 2015.

The train­maker also spent 4.45 bil­lion yuan to pur­chase 2 bil­lion stocks from China United In­surance Hold­ing Co Ltd in Jan­uary. CRRC cur­rently holds a 13.06 per­cent stake in China United In­surance.

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