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China Auto Rental Finds Investors

China Auto Rental StoreEarlier this week, China Auto Rental announced that it has secured a US$200 million equity investment from Warburg Pincus, a worldwide private equity firm that focuses on growth investing. This is the biggest equity financing the rental industry in China has received to date, following a strategic investment in the company by Legend Holdings in August 2010.

China Auto Rental has quickly made itself the leading car hire provider in China since it was established in 2007 with a headquarters in Beijing. As of the end of June, the company had a network of almost 600 locations at 52 major airports and in 66 cities across the country. It also has a fleet of 32,00 vehicles – as big as the combined fleet of the next nine biggest car hire providers.

The investment from Warburg Pincus is expected to further strengthen China Auto Rental’s position as the nation’s leading rental company. Since 1966, Warburg Pincus has invested over $40 billion in more than 650 firms in over 30 countries, as well as has raised 13 funds. It currently has $30 billion of total assets under management in different phases of development and in different industries. This investment follows another in August 2010 of over RMB1 billion from Legend Holdings.

China Auto Rental chairman and chief executive Charles Lu says that Warburg Pincus is a leading private equity company with deep investment experience and a strong record of success. Its investment is a testament to their performance and potential. It will further strengthen their shareholder base as well. With support from Legend Holdings and Warburg Pincus, they will further achieve development in scale and make their brand and product offerings stronger. They are confident they will provide more affordable and high quality car hire services to customers, thus driving the industry’s development in the country, he added.

Warburg Pincus managing director David Li says they have been following the development of China Auto Rental closely for a while. The rental firm has a strong brand, shareholder and customer base, and management team. They will bring more support in terms of funding, branding, international resources and corporate governance.

Li went on to say that Legend Holdings is one of China’s most successful enterprises and has nurtured the development of several corporate management approaches and philosophies, as well as led and boosted the growth of many influential companies, over the last 28 years. They are honoured to have the chance to cooperate with the firm, whose investment arm Legend Capital was the first investor to recognise the opportunity of the nation’s car hire industry and invested in China Auto Rental. Warburg Pincus believes in the company’s prospects and that it will strengthen its leading position in the market to become the first choice among Chinese consumers, he added.

Legend Holdings president Zhu Linan says Warburg Pincus is a leading worldwide private equity firm that has invested in and supported several successful companies. They welcome them and look forward to working with them to give China Auto Rental support to develop, he added. Legend Capital managing director and China Auto Rental director Liu Erhai added that the new investment will increase the rental firm’s growth in China. The management team is committed to pursuing their business vision, he added.




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