General Electric Co (>> General Electric Company) has picked Deutsche Bank (>> Deutsche Bank AG) to sell Italian lender GE Capital Interbanca as part of a strategic review to refocus the U.S. conglomerate around its industrial base, two sources familiar with the matter said.
Milan-based GE Capital Interbanca specializes in lending and financing transactions for medium-sized Italian firms. It employs around 600 people and has a book value in excess of 1 billion euros (£715 million), the source said, without saying how much it might fetch.
Interbanca operates two subsidiaries, namely GE Capital Finance, active in accounts receivable financing, and GE Capital Servizi Finanziari, providing equipment lease and fleet services.
Deutsche Bank could conduct a piecemeal sale and offload Interbanca's units such as lending, factoring, leasing and fleet as standalone businesses as a way to maximise value, one of the sources said.
It could also combine some of the assets with their European equivalents and favour a "bundle" deal provided there is enough appetite from prospective bidders, he said.
Spokesmen at GE Capital and Deutsche Bank declined to comment.
GE on April 10 announced plans to shed most of its finance unit and return as much as $90 billion to shareholders as it becomes a simpler industrial business instead of an unwieldy hybrid of banking and manufacturing.
In all, GE said it planned to shed $275 billion in GE Capital assets. That includes sales of commercial lending and consumer banking businesses with assets of about $165 billion.
The sale of GE Capital Interbanca will kick off at the end of a strategic review which aims to identify whether the business will be sold in parts or in an outright deal, a source said.
But the asset has already drawn interest from several banking institutions and investment firms which have signalled their potential desire to submit bids, one of the sources said.
Private equity firms alongside hedge funds and distressed equity funds are among interested parties, with the latter targeting Interbanca's non-performing loans portfolio, he said.
Formerly part of Banco Santander's (>> Banco Santander, S.A.) Banca Antonveneta unit, it was acquired by GE Capital in 2008 and became part of its GE Commercial Finance division.
Interbanca was founded in 1961 by a consortium of banks comprising Banco Ambrosiano, Banca d'America e d'Italia and Banca Nazionale dell'Agricoltura.
(Additional reporting by Valentina Za in Milan; Editing by David Holmes)
By Pamela Barbaglia