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Inchcape sells Inchroy joint venture

Inchcape plc has sold Inchroy Credit Corporation Limited, the company's joint venture finance company in Hong Kong, to Wing Hang Bank Limited for HKD1,400 million (£92 million) in cash.

Completion of the disposal is conditional upon approvals by the HKMA in Hong Kong and the Federal Reserve Board in New York.

Inchroy is a 50/50 joint venture with BankAmerica International Financial Corporation.

The principal business activities of Inchroy comprise the provision of financing for motor vehicles and equipment and extending personal and mortgage loans. As the company's lending products and customer base have become more diverse it is no longer a core business for Inchcape.

Gross assets of Inchroy were HKD5,300 million (£398 million) at December 31, 2005. Consolidated net profit before tax of Inchroy amounted to HKD103 million (£7.7million) and HKD125 million (£8.4 million) for the years ended December 31, 2005 and 2004, respectively. Consolidated net profit after tax amounted to HKD85 million (£6.4 million) and HKD103 million (£6.9 million) for the years ended December 31, 2005 and 2004, respectively.

The net impact of the sale is expected to be earnings neutral (before any one off costs and amortization of intangible assets) in the financial year ending December 31, 2007. The net proceeds due to Inchcape, 50% of the total consideration, will be reinvested in its core Inchcape business.

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