Shinhan Card said Tuesday it is poised to buy parts of Hyundai Capital’s assets related to its long-term car rental services for around 500 billion won ($417.3 million).
The assets will be composed of vehicles under the South Korean carmaker -- Hyundai, Kia and Genesis -- which Hyundai Capital rents to consumers, as well as rental consumers. The final acquisition price will differ depending on shareholder approval.
The two companies signed the deal on March 9 for the transaction scheduled March 27.
Shinhan Card said the acquisition is meant to enhance its interest income channel by securing more consumers who hire vehicles on a monthly or longer basis.
“The credit card business is now facing difficulties, so for the past three years the company has been exploring new revenue models by focusing on auto financing portfolio and installment loans,” a Shinhan Card spokesperson told The Korea Herald.
“Our financial buffer allows us to strengthen long-term car rental services. ... We see this as a good opportunity.”
Under Shinhan Financial Group’s umbrella, two subsidiaries -- Shinhan Card and Shinhan Capital -- are dedicated to leasing and installment loans. Shinhan Card targets consumers, while Shinhan Capital deals with corporate clients.
Hyundai Capital said it would continue its long-term car hire service, while the new capital will be used to create room for expansion.
By Son Ji-hyoung (firstname.lastname@example.org)