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May 1, 2008

Basement talk

GE Capital...Great men of letters...Coffee lease, please...

By Verdict Staff

GE Cap: we’re not moving

GE Capital is having its fair share of problems, most of which have been made public. But one area in which it is absolutely sure it is having no problems with is the building in Bristol which houses its main UK leasing hub. Some weeks ago GE capital quashed rumours that it was thinking of closing that business.

Doubtless this is still very much the case, despite the fact that Richard Green, the MD of the UK leasing division, is believed to have re-located recently from, er, Bristol to the HQ of GE Cap’s fleet business in Sale.

And this is still also very much the case despite GE Cap’s current efforts to make cutbacks – including, no doubt, consolidating its businesses into smaller numbers of buildings.

We should also, of course, not take seriously the fact that the phone lines into the Bristol office were not working on the two occasions Leasing Life called them last month.

Great men of letters

It seems that in lieu of writing business in 2009, many of leasing’s idle hands are turning to writing letters instead.

In the last month, Leasing Life has caught wind of several missives and manifestos from across the industry, issuing from becalmed brokerages and frustrated recession veterans alike.

These letters are addressed to MPs, Banks, and even overseas royalty, but all have one thing in common: they say that it would be really, really, good if someone – anyone – could put some money into the UK leasing industry. As in, soon. Please?

Coffee lease, please

Whereas UK broker giant Shire Leasing is not involved in the NACFB as a member company, it makes a very significant contribution in terms of moral support: coffee. Specifically a hot drinks vending machine, which the organisation leases from an undisclosed lessor sourced by Shire.

Leasing’s wounded

We know that CIS markets are difficult ground for foreign lessors to prosper in, but not usually due to the risk of physical danger.

Or so we thought. Hypo Alpe Adria Leasing, however, may know something that we don’t. The venerable Austrian leasing institution has seen fit to arrange €250,000 worth of medical insurance for its Ukrainian employees, including ambulatory care, medicinal supply, emergency provision, dental care, hospital treatment, and other mysterious options.

Good luck, Hypo – it’s tough out there.

Van lessors beware

Upmarket supermarket Waitrose is making deliveries with the personal touch – by using a “non-motorised, hand-drawn truck” to transport up to 12 bags of groceries to customers within a mile’s radius.

Waitrose notes: “Hand carts are thought to have been used first in Sumeria over 5,000 years ago, but Waitrose is using an up-to-date version to make deliveries that would normally be undertaken by a diesel-engined lorry.”

Well, good ideas never go out of fashion. But the real question for lessors is, will this switch lead to reduced demand for said diesel lorries?

Swedish spin in press release of the month

Talk about putting a positive spin on things. The Swedish carmaker Saab has filed for bankruptcy protection in its homeland.

Not something to crow about, surely? Yet the press release issued by the manufacturer presents the news as an opportunity, rather than a disaster.

“Saab on the road to independence” is the release’s heading, issued from the wonderfully named Swedish town of Trollhättan, with the new model line-up and the reorganisation of the carmaker prominently featured.

The words “insolvency”, “bankrupt” and “bailout” don’t appear at all, on the other hand. Dr Pangloss (“all for the best in the best of all possible worlds”) would be proud.

A wise move?

As most leasing professionals will tell you, you would have to be extremely brave, extremely well funded or extremely dense to start up an SME-focused leasing business at present.

Celebrity Kerry Katona and her husband Mark, who started up their own leasing business this week, certainly belong in one of those categories.

The company, KK Amusements, intends to get a government grant to buy £5,000 worth of fruit machines to lease out to pubs and bars, although no more complex business plan has emerged.

Despite the naïvety of the venture, the Katonas have one thing in common with most of Europe’s major lessors: they are very heavily in debt.

Here at Basement Talk, we hope to re-port on the resounding success of KK amusements any month now.

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