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A group of 16 financial institutions operating in the UK have joined forces to highlight the value and strength of the UK’s asset based lending (ABL) community by publicising their joint funding capability of £1 billion for UK and European deals.
Chaired by Ted Ettershank and Paul Hancock of Lloyds TSB Commercial Finance and JP Morgan respectively, the group has joined together as a collaborative effort to promote the benefits of ABL. This initiative is partly in response to ABL’s growing useage by private equity groups and larger corporates working on more multicurrency cross border transactions in the buyout and acquisition arena.
"The UK corporate finance community is already becoming aware of the very significant potential that ABL has to offer. As a group, we want to help grow that awareness.
"We also want to demonstrate the great opportunity we have to support
business needs through working together on ever larger syndicated deals. The
potential to facilitate business that this collaboration brings really is huge!"
says Ted Ettershank, Managing Director of Lloyds TSB Commercial Finance.
Ettershank has been a leader within the Industry for over 30 years and has been
at the forefront of its development throughout.
Commenting on the opportunity, Paul Hancock, Managing Director JP Morgan, who has worked in the industry for over 20 years, said "ABL genuinely represents a new form of debt capital when compared to traditional cashflow debt. It appeals for a variety of reasons but in particular for the fact that for some businesses it can provide a higher level of debt, that often much of the debt is non-amortising and typically there are a fewer financial covenants. These all have helped ABL to really take off in the last two to three years for acquisition finance."
Michael Pratt, Director of Financial Reporting at Ashtead Group Plc, one of the largest equipment rental groups in the world, said: "We have benefited from our ABL facility. It works well for an asset intensive business like Ashtead and has given us the capacity to invest in additional fleet to meet strong market demand."
Recent deals include:
" January 2007, Landsbanki provided a £50 million revolving credit
facility to help fund working capital for MFI Retail, the UK’s leading kitchen
and bedroom retailer with a footprint of over 200 stores and over 3,000 employees.
" Hertie, the German department store (formerly Karstadt Kompakt) secured
a €55m financing deal with GMAC CF to finance the refurbishment and modernisation
of Hertie stores and fund the implementation of new IT and logistics functions.
" October 2006, GE supported Och- Ziff Management Europe, part of the US
Hedge Fund, on its groundbreaking public to private deal of Whitehead Mann,
one of the world’s best known executive headhunter consultancies.
" July 2006, Lloyds TSB develop a multimillion pound working capital package
to lead the management buyout of Peter Black Holdings Ltd for Endless LLP. The
transaction was effected through a new parent company Peter Black International
Limited, and included four trading divisions.
" February 2006, Venture Structured Finance provided COSi Group Limited,
the outsourcing manufacturer of cosmetics and personal care products, with a
£20m refinancing package.
" February 2006, Burdale Financial Limited (Burdale) and Lloyds TSB provided
MFI Furniture Group (now known as Galiform Plc), the UK’s leading national retailer
of quality fitted furniture, with a £150 million facility to replace MFI’s
existing revolving syndicate credit facility.
" January 2006, Bank of America provided Waterford Wedgwood Plc, the word’s
leading luxury lifestyle group, with a €200 million asset-based restructuring
deal.
ABL Members, who are all members of the FDA, include Bank of America, Barclays,
Burdale Financial, Davenham, Eurofactor, Five Arrows, Fortis, GE, GMAC CF, HSBC,
JP Morgan, KBC Business Capital, Landsbanki, Lloyds TSB, RBS and Venture Finance.
To view photos from the ABL Group Launch please click
here