Newcourt, The Associates finalize fleet leasing deal

TORONTO (July 2, 1999) — Newcourt Credit Group said it has completed the sale of its automotive fleet leasing business to Associates First Capital Corp., allowing it to focus on commercial financial deals.

The transaction includes Newcourt Fleet Services (formerly BML Leasing), which manages a fleet of 30,000 vehicles in Canada, and Newcourt Automotive Services, which oversees 11,000 vehicles in the UK. The Associates said it is acquiring assets valued at $400 million US.

Terms have not been disclosed.

The deal puts The Associates, based in Dallas, among the three largest automotive fleet management companies in Canada. The company has nearly 205,000 vehicles under management in the United States and more than 17,000 vehicles in Canada. It entered the Canadian market place in 1997 with the acquisition of AT&T Capital Fleet.

“As we stated in our 1998 Annual Report, Newcourt is reviewing all of its businesses to ensure they meet with our long-term objectives of being one of the top three global competitors in the businesses with which we operate,” stated Newcourt executive vice-president Paul Currie. “The sale of Newcourt’s fleet management business to The Associates will remove Newcourt from this business and allow Newcourt to focus on its core corporate and commercial financing business.”

Newcourt is one of the world’s largest sources of asset-based financing serving the corporate, commercial, and institutional markets with owned and managed assets of $25.1 billion US.

The company is looking to sharpen its focus, however, amid reports that unsteady earnings recently could scuttle its acquisition by The CIT Group Inc. of New Jersey. In a statement issued June 30, Newcourt CEO Steven K. Hudson assuredly said that Newcourt’s second quarter cumulative earnings per share would exceed expectations established in the agreement with CIT.

Earlier this month, Newcourt shuffled its management ranks, naming Daniel A. Jauernig president of joint venture operations and Borden Rosniak chief financial officer until the company’s acquisition by CIT has closed.

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