Fleet News

Lombard to sell Lex controlling stake to allow BCC fleet to expand

LOMBARD North Central is to sell its controlling interest in Lex Vehicle Leasing to Lex Service to allow the finance house subsidiary of National Westminster Bank to concentrate on expanding the fleet of British Car Contracts.

The long-expected development was first mooted as a possibility 20 months ago when Lombard announced it was buying Rover's 50% stake in BCC to add to its own 50% stake. The sale, which is subject to approval by Lex Service shareholders, is expected to be completed by the end of this month.

Lombard has a 50% stake in Lex Vehicle Leasing, but under the terms of the deal Lombard will initially sell 30% of the share capital of Lex Vehicle Leasing for £83.5 million, with £48.5 million in cash payable on completion and £35 million plus interest in cash on April 6, 1999. Lex and Lombard will each have options whereby Lombard's remaining 20% stake in Lex Vehicle Leasing share capital can be bought by Lex Vehicle Leasing with the option being exercisable at certain points prior to June 30, 2001 at a price of £45 million plus an incentive payment calculated on any increase in the net asset value of Lex Vehicle Leasing over £102 million.

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