Beijing (ZXZC)- On April 12th, Dongfeng Motor Group Co., Ltd. (DFM) announced that the company has struck a deal to acquire a 75% of stake in Dongfeng Peugeot Citroen Auto Finance Co., Ltd. (DPCAFC) from PFN and Dongfeng Peugeot Citroen Automobile (DPCA). 

Photo credit: Dongfeng Motor

The announcement specifies that PFN and DPCA will give up each’s 25% and 50% of stake in DPCAFC for RMB3.718 billion ($584.1 million). After the transactions, DPCAFC will be 100% wholly-owned by DFM. 

DPCAFC is a financial service company offering car loans to dealerships and auto consumer credit for individuals and commercial accounts. The company’s existence helps promote sales of new and second-hand vehicles of Dongfeng Motor. 

DFM expressed that China’s auto consumer finance market holds great potential. Therefore, the equity transfer will induce a synergistic effect between the group’s financial business and manufacturing operations, advancing the quality development of its manufacturing operations. 

To be specific, Dongfeng Motor’s financial situation needs improvement. After the transactions, DPCAFC can help DFM integrate its financial businesses and strengthen its ability to raise capital. DFM believes that the changes will take some financial pressure off its shoulder.

By December 31, 2021, the book value of DPCAFC’s net asset amounted to RMB3.947 billion ($620.07 million). Its appraisal value summed up to RMB4.957 billion ($778.741 million).