- Published 2026.10.21 20:52
Partner BAIC to fully exit its 47% stake
Capital reduction amid weak earnings to build independent management
Hyundai Capital is moving to make Beijing Hyundai Auto Finance (BHAF), its auto finance joint venture in China, a wholly owned subsidiary. The Chinese joint venture partner is fully exiting its stake through a capital reduction. The move is aimed at clearing the joint venture relationship and building an independent management system to find a breakthrough amid deteriorating earnings caused by sluggish auto sales in China.
According to a disclosure by China's BAIC on Oct. 21, Beiqi Investment (33% stake) and Beijing Hyundai (14%), the second-largest shareholders of BHAF, signed an agreement to fully dispose of their combined 47% stake through a capital reduction. Beiqi Investment and Beijing Hyundai will receive a total of 3.145 billion yuan (about 607 billion won) in return.
Before the capital reduction, BHAF was owned 46% by Hyundai Capital (Hyundai Finance), 33% by Beiqi Investment, 14% by Beijing Hyundai, and 7% by Hyundai Motor. Beijing Hyundai is also a 50-50 joint venture between Beiqi Investment and Hyundai Motor. In this transaction, the total enterprise value was assessed at 6.69 billion yuan (about 1.29 trillion won).
Once the capital reduction is completed, BHAF's registered capital will decrease from 4 billion yuan (about 772 billion won) to 2.12 billion yuan. With BAIC's stake fully removed, Hyundai Capital and Hyundai Motor will hold 100% of the company, making it a wholly owned subsidiary. The agreement will take effect after approval from China's National Financial Regulatory Administration.
BAIC's exit comes amid the joint venture finance company's recent weak earnings. Established in June 2012, BHAF posted a net profit of 78.73 million yuan (about 15 billion won) in 2024, but the figure fell to 44.48 million yuan in 2025. In the first half of this year, it swung to a net loss of 123 million yuan on revenue of 142 million yuan. The downturn in China's auto market and declining sales at Beijing Hyundai led to deteriorating profitability.
BAIC plans to use the funds recovered from the stake sale to strengthen its core business competitiveness. In its disclosure, BAIC said, "This exit is intended to optimize our asset structure and improve capital efficiency," adding, "The recovered funds will be used for the company's business development." Hyundai Capital will push ahead with efficiency improvements and restructuring of its financial business in China based on its sole management control.
※ This article is an AI translation of the Korean original published by Korea Credit News; it was checked by automated quality guards and published by the English edition desk.
