The new company, which will be formed through Barclays acquiring a controlling interest from Fiat in Iveco Vehicle Finance Business, will initially provide services in the UK, Italy, France, Germany and Switzerland, with a joint intention to commence business in other European countries to follow.
Iveco will transfer certain subsidiaries of Iveco Finance to the new company and Barclays will then acquire a 51% share and controlling stake in the company for a consideration of E96.8 million. The deal will enable troubled Fiat to rid itself of around E2 billion of its debt burden.
For Barclays Asset and Sales Finance the new company will provide the platform for further expansion of its existing operations, which already enjoy a strong presence in many of Iveco’s principal markets, as well as the opportunity to develop new markets. The transaction also serves to accelerate the Barclays Group’s strategic aim of developing retail and commercial banking activities in selected markets outside the UK.
Iveco Finance is the prime supplier of hire purchase, finance leasing, instalment loans and contract hire solutions for Iveco commercial vehicle operations in France, Germany, Italy, Portugal, Spain, Switzerland and the UK. As at the end of 2004 it had total receivables of E2.2 billion.
The Barclays deal is the latest in a series of moves by Fiat to reduce debt. The Italian car maker has already sold controlling stakes in CNH’s European financial services to BNP Paribas and Fidis, Fiat Auto’s consumer finance arm, to its four main Italian creditor banks.
