LG Innotek Appoints HSBC as Cash Management Provider in China
LG Innotek has chosen HSBC Global Payments and Cash Management to provide a range of cash management services to LG Innotek’s subsidiaries in China. LG Innotek is Korea’s first general electronic component company with an overseas network across Asia, US and Europe.
After merging with LG Micron in 2009, LG Innotek has made substantial advances towards its goal of becoming a global electronic component manufacturer and understands the importance of China as a strategic stepping stone to achieving this goal.
HSBC will provide renminbi (RMB) and US dollar cash pooling services to three Chinese subsidiaries of LGInnotek in Yantai, Huizhou and Fuzhou. This liquidity solution will enable the subsidiaries to significantly save on financial costs by allowing them to share working capital within themselves thus minimising external borrowings.
Park Hui Chang, chief financial officer (CFO) of LG Innotek, said, “Our headquarters in Seoul will be able to directly manage the liquidity of our Chinese subsidiaries through HSBC’s innovative cash management solution. This will greatly reduce our financial expenses, enhance financial transparency and strengthen control over our local subsidiaries, which in turn will contribute to our growth throughout the region. With this partnership, I am confident that LG Innotek will be able enhance our global competitiveness to become one of the largest electronic components manufacturers by 2015.”
This partnership between HSBC and LG Innotek is also a significant milestone as it is the first US dollar cash pooling solution approved by the State Administration of Foreign Exchange (SAFE), Guangdong Branch since the new regulation on centralised foreign currency funds management was issued in October last year.