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Antonio Fabrizio

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In some respects Agrileasing is a
typical Italian leasing company. It has a strong focus on real
estate, it is affiliated to a large banking group, and its client
base is made up of a myriad of small companies.

But Italy’s fourth largest lessor is,
in fact, different from its domestic competitors in several crucial
ways – a key one being that while the bulk of leasing companies in
Italy have seen a crash in new business and a hike in bad debt
since the recession started, Agrileasing has seen a much smaller
decline.

Last year, when the market fell by 21
percent, Agrileasing dropped 16 percent. In the first half of 2009,
while the market was 40 percent down, the lessor only declined by
13 percent.

Exactly how has it achieved
this?

According to Agrileasing’s new
director general, Enrico Duranti, who has been at the helm since
July 2009, the answer to this question has been its ability to be
more “constant” than its competitors. In particular, this has
included avoiding one-off, larger real estate transactions.

But, Duranti added, the biggest change
has been its increasing focus on non-leasing areas, including
structured finance, project finance and corporate finance. Duranti
has been instrumental in making these changes – and it was only
natural for him to do so as he cut his teeth in corporate finance
at Bank of America, Sofipa and BCC Capital, which merged with
Agrileasing in 2005.

His focus on ‘sexier’ forms of finance
has not meant he has neglected doing the bread- and-butter work of
an Italian leasing company. Supported by its parent, the
Cooperative Credit Banks (BCC), from which it sources 80 percent of
its business, the mainstay of Agrileasing’s business continues to
be the professions, particularly skilled craftsmen, dentists and
lawyers.

Another important source of business
for the lessor are SMEs, despite the fact they are contributing to
a rise in arrears and bad debt at Agrileasing. The lessor recently
signed up to a moratorium scheme which allows SMEs with good credit
histories to suspend for 12 months the payment of their leasing
loans.

It is also looking to support smaller
businesses of this kind outside Italy, as well as within its
boundaries. In fact, today, enhancing non-Italian business is a key
part of Agrileasing’s business strategy.

A special focus area is the
Mediterranean, but it plans to invest far beyond the confines of
just Europe. The lessor recently signed agreements with SIMEST and
FINEST, two government institutions promoting the activities of
Italian businesses abroad, enabling Agrileasing to establish
commercial units outside the EU.

Office in Tunisia opens
2008

“There are over 600 Italian firms
in Tunisia, therefore we wanted to exploit that opportunity, not
just for expanding in Tunisia but all over North Africa, using
Tunis as a launchpad for the region,” Duranti said.

So far, the company has only secured a
dozen agreements as the recession has slowed investments, but
Duranti has high expectations for the future.

“There is a huge potential as
international firms look at ways to reduce costs by moving part of
their production units to North Africa,” Duranti added.

To illustrate this, Duranti pointed to
the fact that Airbus recently set up a components factory in
Tunisia in order to save costs.

Meanwhile, Agrileasing is innovating
in other ways – particularly in the renewable energy sector (see
box, below), and is also looking to hike its shipping finance arms.
Joint ventures with other leasing companies outside the EU which
could benefit from Agrileasing’s know-how are on the cards,
too.

With all this focus on expansion and
innovation, it has delayed doing what so many other lessors have
done and carried out a restructuring of the company’s back and
front offices – details of this are due to be revealed at the end
of this year. Meanwhile, Agrileasing’s business model appears to be
one many European lessors should be looking up to.

Using a mix of project finance
and leasing, Agrileasing recently launched several key renewable
energy financing projects, particularly in the field of
photovoltaics, the application of solar cells for energy.

During the first half of 2009 the
company secured over 30 operations for installation of up to
one-megawatt photovoltaic-related systems. Each one costs around
€15 million.

It has also financed a three-megawatt
photovoltaic power plant for the API Group in the Marche region in
Italy. This is part of a massive project, jointly financed with
another lessor, Medioleasing, to build Italy’s largest photovoltaic
power plant. Agrileasing is also financing a photovoltaic project
in Sardinia for France’s EDF Energies Nouvelles.

In the biomass sector, it has signed a
deal with Italy’s Fri-El group in the sector of liquid biomass for
a thermoelectric power plant in Acerra, near Naples. In this case,
Agrileasing acted as the arranger for the deal, a €90 million
investment pooled by five leasing companies.

Smaller investments included biogas
plants for consortia of farmers, which produce biogas from organic
material such as maize debris and animal manure.

Duranti said: “The good thing with
renewable energy financing is that there is a revenue component
which is certain. It comes from the sale of energy and government
incentives to invest in green energy, which are not unpredictable,
as can be the case with other projects depending on the
fluctuations of consumer markets.”