UK-based commercial vehicle lessor Asset Alliance Group (AAG) has recently navigated a complex financial restructuring, establishing a new three-way financing deal involving its outgoing private equity partner and a new private and commercial bank. This agreement, reached after three months of negotiation, demonstrates AAG’s resilience in the face of industry challenges, exacerbated by the Covid-19 pandemic.
Even before the pandemic, the global commercial vehicle sector was grappling with significant pressures, including stricter emission standards, the rise of alternative fuels, the transition to electric vehicles, and the increasing role of big data. For leasing companies like AAG, which manages a fleet of over 4,000 heavy vehicles in the UK, these challenges were further compounded by the economic impact of the pandemic. Reflecting on the events of 2020, Willie Paterson, the company’s CEO, highlighted the government’s approach, which encouraged businesses to seek payment holidays from lessors, often with the mistaken assumption that all lessors operate as banks. AAG, not being eligible for government support, had to rely on its reserves and capital to sustain operations during this period.
Despite these hurdles, Paterson successfully orchestrated a deal that satisfied all stakeholders, including the company’s management, the exiting private equity partner Cabot Square Capital LLP, and its new financial partner, Arbuthnot Banking Group. The transaction, valued at approximately £4.1 million, involved the sale of the entire share capital of Asset Alliance Group. With regulatory approval pending, the company assures that the daily operations and management structure will remain unchanged, with all existing senior team members continuing in their roles.
AAG’s ability to secure this new financing arrangement during a time of unprecedented industry disruption underscores the company’s adaptability and strategic acumen.
Arbuthnot Banking Group PLC (LON:ARBB), trading as Arbuthnot Latham, provides private and commercial banking products and services in the United Kingdom. Founded in 1833, Arbuthnot Banking is based in London, United Kingdom.
