Ge Capital Hikes Stake In Countrywide To 55 Per Cent

GE Capital, the United States-based financial giant, has increased its stake in Countrywide Consumer Financial Services Ltd (CCFSL) from 50 per cent to 55 per cent. With this, the Housing Development Finance Corporation (HDFC), which was sharing a 50:50 status with GE Capital, has become a minority partner in CCFSL.

The change in the shareholding pattern, however, is not expected to usher in any changes in the management. The HDFC chairman, Deepak Parekh, chairman, will continue to be chairman of CCFSL.

Deepak Parekh told Business Standard that GE Capital's move is aimed at consolidating the accounts of CCFSL into its books in the United States, when it draws up the balance sheet.

 

Three years ago, when HDFC signed an agreement GE Capital to from CCFSL, the US financial giant had been given the option of raising its stake to 55 per cent and was issued fully convertible debentures with the option to convert them into equity shares at par.

CCFSL was jointly promoted by HDFC and GE Capital in India with a view to tap the growing market for consumer finance. CCFSL pioneered the promotion of private labels like Maruti Countrywide Ltd, which exclusively finances the Maruti models.

GE Capital is also foraying into the financial sector in a big way. It recently acquired SRF Finance, which enables it to enter commercial vehicle financing. GE Capital has also tied up with State Bank of India to float a credit card joint venture. Besides, it has an active presence in portfolio buyouts.

In fact, the US financial giant's strategy has been make its presence felt in all segments of the Indian financial sector -- CCFSL for consumer financing, GE Capital for portfolio buyouts, SRF Finance for commercial vehicle financing and the venture with SBI for credit cards.