examines the top asset finance deals of the past month
Compiled by Katherine Gregory.
Refinancing
Go deeper with GlobalData
Lender: KBC Business Capital
Customer: Burn Stewart Distillers Ltd (BSD)
Deal value: £31m Integrated Asset Based Lending
KBC Business Capital, a division of Belgium based KBC Bank, has
embarked on a unique project – financing brands, inventories and
distilleries, in the form of a re-financing package and new banking
facilities to Scottish based Burn Stewart Distillers (BSD). The
£31m deal will enable BSD, which is part of international
conglomerate, CL Financial, with increased headroom and the ability
to restructure its existing debt package from a rigid, amortising
term debt structure to a revolving facility.
Paul Hooper, sales director at KBC Business Capital said:
“Utilising this methodology allowed us to generate significantly
more headroom and a funding structure more appropriate for the
sector than had been available under more traditional financing
methods.”
KBC Business Capital’s facility, which offers cash flow term
lending of between £2m and £50m, gives businesses with inventory,
revolving assets and account receivables, flexibility with their
financing and debt arrangements, allowing for cash release instead
of a high level of long term lending.
“We structure the debt facility according to the type of assets,” a
spokesperson for KBC Business Capital said.
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By GlobalDataThe intangible nature of the assets financed in the deal invited
the use of valuation specialists in beverage brands and inventory,
Intangible Business, to assist KBC in determining the market value
of the assets. The assessment took into consideration the
correlation between brand value, volume of sales and margins, a KBC
spokesperson said. Wragge & Co provided legal advice.
KBC Business Capital’s W1SE, a centralised internet based cash
management solution, will also be integrated into the deal.
BSD’s inventory ranges from malt brands Bunnahabhain, Tobermory
and Deanston as well as the more household names Scottish Leader
and Balck Bottle. BSD has a financial history with KBC, after KBC
Peel Hunt, the stockbroking arm of KBC Group took the company off
the stock market into the private hands of Trinidad based CL
Financial in 2003.
Working Capital
Lender: KBC Business Capital
Customer: Alumiumwerk Unna AG
Deal value: £7m
KBC Business Capital has provided £7m in acquisition financing
and working capital for Aluminiumwerk Unna AG (Unna), the German
aluminium goods producer, to acquire the subsidiary of Luxfer
Group, BA Tubes Ltd. The financing term is extended over five
years.
Based in Redditch with 120 employees, the newly acquired
company, now renamed ALUnna Tubes Ltd, will specialise in
manufacturing aluminium tubes for the aerospace, automotive and
office machine sectors – complementing Unna’s existing aluminium
tubes manufacturing business in Germany. The new company will allow
Unna to expand capacity, enhance sales and ensure faster turn
around of orders.
Furthermore, KBC’s asset based lending facilities allows for
flexibility in the financing and working capital for Unna’s
accounts receivable, inventory and plant machinery, as well as
day-to-day banking facilities, money transmission and hedging
facilities, via KBC’s banking network.
David Betts, managing director at ALUnna Tubes Ltd said: “This
transaction puts the two leading tube manufacturers in Europe
together and secures a long term future for manufacturing on the
site in Redditch. 30-40 new jobs will be created and the
opportunity to benefit from sharing both product and process
technology between the two business is really exciting.”
Vendor Finance
Financier:Siemens Financial Services
Vendor: Canon Svenska
Deal value: €180m
In a strategic move away from in-house finance provision,
Swedish based Canon Svenska selected Siemens Financial Services
(SFS) to provide all point-of-sale finance for its direct business
unit and support its network of franchised dealers. Spread over
four years, the €180m finance deal functions like a vendor finance
partnership, aiming to untie the burden for Canon to offer the
total finance solution to its end customer.
“The Swedish market differs to other European markets; there are
no brokers, and the relationship is always direct between vendor
and finance company,” Anders Astrom, managing director of SFS
said.
Astrom added that Canon Svenska, which has a turnover of over
SEK 2m (€214,000) per year and boasts 430 employees, identified SFS
as its preferred partner in terms of price and service.
“As the global credit challenges continue we are confident in
our ability to help Canon’s customers afford business critical
digital imaging solutions through the calculation of tangible
Return-on-Investment figures.”
SFS hopes to set a precedent for other similar vendor finance
arrangements with other corporations in other countries across
Europe.
Heavy vehicles
Lessor: Scania
Lessee: Veolia Transport
Deal value: 50 coaches, approx: €200,000 per coach
Heavy vehicle manufacturer, Scania, will provide and offer
finance options for 50 coaches to French based Veolia Transport,
for the transportation of VIP guests at the 2008 European Football
Championships this June.
Utilising this high profile, international event, Scania will
deliver both two and three axle coaches of different lengths and
heights with various locally adapted solutions for service and
maintenance. Anders Dewoon, Sales Director Scania Irizar Coaches
said that 15 of the coaches will be financed via a rental basis,
and the remainder 35 will go under either finance or operational
lease agreements, depending on their final market and uses.
As the French based Veolia Transport, which operates in Europe,
North America and Australia in the framework of public-private
partnerships, will continue to use the vehicles after June 2008
across its franchises in Europe. Veolia’s passenger options include
buses, light rail systems, metros, taxis, coaches, trains, ferries,
as well as passenger information and trip management systems.
Melker Jernberg, responsible for Scania Buses and Coaches said:
“Deals like this prove Scania’s standing as a respected supplier of
complete vehicles with comprehensive international service
backup.”
In 2007, Scania’s invoiced sales totalled SEK 84.5bn (€9.05bn)
and net income amounted to SEK 8.5bn (€910m).
