New York-based Cerberus Capital Management is currently acquiring the Vendor Finance portfolio from Westpac Group, and is reportedly now eyeing up its $10 billion dealer finance and car loan portfolio.
Westpac Group has instructed Morgan Stanley to seek bidders for its $10 billion dealer finance and car loan portfolio according to The Australian, reporting that Cerberus is one of the parties that will make a bid for the business.
The Group is a major supplier of floorplan finance to new and used vehicle dealers in Australia, which allows them to purchase stock, repaying the loan when the vehicle is sold to a new owner.
Ceberus was the company which bought US manufacturer Chrysler-Jeep from Daimler in 2007 and lost billions before the brand was bailed out by the US Government and then bought by Fiat.
Westpac already has an agreement with a Ceberus portfolio company Angle Finance, for the sale of the banks Vendor Finance book. Completion of the transaction is expected to occur at the end of April 2021.
Vendor Finance supports third parties to fund small ticket equipment finance loans to around 42,000 Australian businesses. The transaction is expected to result in the transfer of around $500 million of customer loans.
Vendor Finance currently operates out of the Westpac subsidiary Capital Finance Australia Limited (CFAL).
Westpac says it will continue to retain and manage the remaining CFAL Equipment Finance business in its Business Division.
More to follow.
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