Chinese car rental firm eHi receives $242m in financing

An eHi Car Service outlet in Shanghai. [Photo/Provided to China Daily]

SHANGHAI - NYSE-listed Chinese car rental firm eHi Car Services announced on Monday that it had reached a deal with a Chinese policy lender for $241.5 million of funding.

The deal with China Development Bank (CDB), one of China's three policy lenders, will allow eHi to receive 1.5 billion yuan in credit through multiple financial instruments for five years.

The funding will be used to expand eHi's existing network and car fleets, said eHi's CEO Zhang Ruiping. The deal also includes car-related fixed asset investment by the Shanghai-based eHi and CDB's Shanghai branch.

The company reported a 60.7-percent rise in revenue during the first quarter this year and 3.6 million yuan in profits, marking the first time the car rental service has been profitable after floating its shares in November last year.

Investment firm Tiger Global also increased its stakes in eHi to 30.5 percent, according to the company's filing with the US Securities and Exchange Commission on July 3.

Another Chinese car rental service, Didi Kuaidi, also announced earlier this month a fresh round of financing from existing and new investors totaling $2 billion to fund expansion in premium car services and car pooling.

US firm Uber is also seeking financing for its China operations to compete with domestic rivals such as Didi Kuaidi for ride-on-demand services.