One of Australia’s top banks has announced plans to sell its asset finance subsidiary, which finances approximately $500m (£274m) in loans.
In a statement, Westpac Group said it had agreed to sell its Vendor Finance business to Angle Finance, a portfolio company of Cerberus Capital Management LP.
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“Vendor Finance supports third parties to fund small ticket equipment finance loans to around 42,000 Australian businesses. The transaction is expected to result in the transfer of around $500 million of customer loans,” Westpac said in a statement.
Jason Yetton, chief executive of specialist businesses at Westpac, said: “The sale represents the first transaction of the Group’s simplification initiatives and brings certainty for Vendor Finance customers and new opportunities for our people.”
“Given the relatively modest size of the portfolio, the sale is expected to have a negligible impact on Westpac’s balance sheet and capital ratios.
“There is expected to be a small accounting loss on sale due to the transaction being structured with an initial payment on completion and deferred consideration payable over the two-year period following completion,” it said.
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By GlobalDataThe transaction will be completed at the end of April 2021.
Vendor Finance currently operates out of the Westpac subsidiary Capital Finance Australia Limited (CFAL). Westpac will continue to retain and manage the remaining CFAL Equipment Finance business in its business division.
Last year it was reported in the Australian press that equipment finance lender Axsesstoday was bought by an affiliate of private investment firm Cerberus Capital Management LP.
Promontoria Holding 304 BV, an affiliate of Cerberus Capital Management LP, bought equipment finance lender Axsesstoday for the sum of $260m, reports said.
The provider for the transport, hospitality and other industries went into voluntary administration in early 2019.
Westpac describes itself as a leading equipment financer in Australia & New Zealand with a portfolio of assets worth over $20bn, offering leases that range in value from $10m to $300m across all customer industries and sectors.
