General Electric has decided that it will ‘retain and grow’ its UK equipment finance business, in an apparent U-turn from April’s announcement that it would sell the majority of its finance business GE Capital, including its lending and leasing arm.
In April, the assets targeted for disposition included "most of the commercial lending and leasing segment", and all consumer platforms, including all U.S. and international banking assets, which represented roughly $200bn (182.6bn) in net investment.
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GE said at the time that it would keep its financing units used for capital aviation services, energy financial services and healthcare equipment finance, which hinted at a possible retreat to ‘captive’ status for the lessor.
But now the US giant has clarified its position, deciding to keep its UK equipment finance arm.
In an exclusive statement to Leasing Life, Gabriele D’Uva, UK managing director for equipment finance, said that GE’s commitment was to ‘deliver for our equipment finance UK customers, shareholders and employees’.
D’Uva said: "On 10th April, GE announced that in order to create a simpler company, GE Capital will focus on the businesses which finance GE’s key industrials, Energy Financial Services, Healthcare Financial Services, Working Capital Solutions and GE Capital Aviation Services, and reduce its size through the sale of most other GE Capital assets.
"In the UK we intend to retain and grow the Equipment Finance UK business. We remain committed to supporting our customers and building out our UK focused asset leasing business in each of the segments we operate in utilising our strong industry expertise and capabilities."
The US company originally said it planned to raise around $90bn from the sale of GE Capital to give back to shareholders, and began by selling $26.5 billion of its real estate holdings to private equity firm Blackstone and US bank Wells Fargo.
At the end of June, Arval, the fleet arm of BNP Paribas Leasing Solutions, signed a memorandum of understanding to acquire GE Capital Fleet Services business in Europe, which had vehicle assets worth 2.4bn in Q1 2015.
The scope of that acquisition covers more than 160,000 vehicles in 12 European countries, with more than three quarters being in UK, Germany and France.
The deal was part of a global transaction in which Element Financial Corporation, Arval’s partner in North America, agreed to buy GE Capital Fleet Services’ businesses in the United States, Mexico, Australia and New Zealand.
Additional reporting by Sotiris Kanaris
