The management of Universal Leasing Ltd has bought out 75
percent of the business from its parent company, GFKL Financial
Services AG.
The MBO for Universal Leasing Ltd includes its subsidiaries,
Admiral Leasing and Hanover Finance, which had previously been
acquired by the UK business.
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Last October, GFKL, the German financial services group, sold
its Spanish car leasing arm, Universal Lease Iberia, to ING Car
Lease, announcing that the group would be selling all of its
leasing operations to focus on its collections, factoring and
software business lines. The latter currently employs around 1,300
employees, service receivables worth more than €20 billion.
According to a statement by GFKL, it was agreed to keep the
price of the MBO, which occurred on 31 December 2008, “tightly
under wraps”. However, according to Universal Leasing Ltd’s latest
results published in December 2007, the company then had a net
value of -£3.9 million (-€4.1 million), down from £6.5 million the
previous year, with a turnover of £84.1 million, up from £67.4
million in 2006.
Having sold the UK and Spanish arms of Universal Leasing, GFKL
will now run out its German leasing operations over the next few
years.
The company expects that divesting its leasing business lines
will free around €150 million of liquidity, which it will reinvest
in its other, more profitable business lines.
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By GlobalData“The shift in the underlying conditions governing the financial
markets is the main reason for the gradual separation of the
leasing portfolio,” said GFKL chief executive officer Peter
Jänsch.
“The refinancing situation has deteriorated to such an extent
that our leasing business’s position, as well as the security for
the refinancing process, has been compromised.”
Universal Leasing Ltd, established three years ago in the UK,
represented 15 percent of GFKL’s €1.6 billion leasing portfolio and
employed around 100 people, including those in its Admiral Leasing
and Hanover Finance businesses.
“We are responding to the worsening of the refinancing situation
in the capital markets,” Jänsch added. “Existing credit agreements
will all be met and the existing leasing business will continue to
be managed as before over the next few years, but new business will
be discontinued
In its latest results, released in December, GFKL reported 16
percent growth to €807.6 million in the first three quarters,
although earnings before tax of the entire group fell by 28 percent
to €15.8 million due to the restructuring activities. With the
separation of its leasing businesses, GFKL expects to halve its
total assets and improve its equity ratio to reach 20 percent.
