Allied Credit considers Westpac’s auto credit business
Allied Credit, the auto finance company backed by former UBS Australia boss Matthew Grounds, is reportedly vying for Westpac’s portfolio of auto loans for sale through investment bank Morgan Stanley.
The company’s tilt would coincide with a return of Mr Grounds to the investment banking scene, with reports circulating in the market that he has finally joined the top ranks of Barrenjoey Capital.
It was after much anticipation that he would be part of the investment banking start-up launched by several senior UBS executives, including Guy Fowler, executive chairman, and founding partner bankers Matt Hanning and Chris Williams. .
Sources say Mr Grounds had a non-solicitation agreement in place that was originally scheduled to end in December, but was later extended until March or April.
Mr Grounds did not respond to a call from DataRoom, while Barrenjoey Capital did not say whether he was started at the company.
However, several sources say they understand that he has already worked for at least a week in the investment banking start-up.
Mr. Grounds is considered an investor in Allied Credit, which would now be vying for Westpac’s auto loan business.
DataRoom may reveal that it will be competing with listed personal loan provider Plenti to buy the division and Taurus Motor Finance.
The suitors are expected to be backed by large private equity funds in their efforts to purchase the Westpac auto loan operation.
Initially, more than 30 parties reportedly signed non-disclosure agreements to review the portfolio. However, over the past fortnight, the competition has reportedly taken a different direction.
Initially, it was understood that $ 11 billion in loans were offered to a buyer.
But now it is believed that Westpac is only considering selling the opportunity to land any new business and that it would keep the existing loans that are in place.
That leaves suitors vying for roughly $ 2 billion in loans, with floor plan funding still on offer, rather than the $ 11 billion originally supposed to be up for grabs.
The company writes about $ 5 billion in loans per year, so any potential buyer would need the support of a group with deep pockets.
Other private equity firms believed to be lining up for the portfolio are Cerberus, TPG Capital with Liberty Financial and Bain Capital.
Barrenjoey Capital could be well positioned to land an advisory role with Westpac, which is looking to sell non-core assets.
Mr. Grounds is said to have a close relationship with Managing Director Peter King and there are many more assets for sale by Westpac.
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