HSBC Holdings Plc, Europe's largest bank by market value, announced that it had signed a deal yesterday to acquire Chailease Credit Services Co (迪和), one of the nation's leading factoring companies, in a move to expand its international factoring business.
Taiwan is the world's second- largest factoring market, after Germany.
Factoring companies buy other companies' accounts receivables -- money owed by customers to a third party in exchange for goods or services that have been delivered but not paid for -- and then collect them from the debtor.
The 100 percent acquisition of Chailease Credit will be completed in the first quarter, Kenneth Cheng (
Cheng declined to disclose the sum of the all-cash acquisition. He said, however, that the amount would be calculated based on Chailease Credit's net income last year. Chailease has net assets worth US$10 million, he added.
Chailease Credit, which belongs to Chailease Finance Co (中租迪和) under the Chinatrust Group (中信集團), was set up in 1987 and is the sixth-largest factoring firm in Taiwan.
It had a gross asset value of NT$3,264 billion (US$99.6 million) at the end of 2005 and focuses mainly on two-factor export trade, handling transactions in both buyer and seller-use factoring.
More than 70 percent of Chailease Credit's turnover is derived from export factoring business, while import and local factoring account for 20 percent and 10 percent respectively, Cheng said.
"Chailease Credit is established in the area of export factoring. It has a strong sales force and a long history. The purchase matches our strategy as HSBC wants to increase its international factoring business," he said.
HSBC already has a small factoring operation in Taiwan.
The acquisition will substantially increase its market share and add to its increasingly popular cross-border services in the region, a HSBC statement said.
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