Recent Press
PRESS RELEASE
Merchant House Finance Continues to Expand
9 May 2007
Major developments are taking place at Merchant House Finance Ltd (MHF), the company that was launched in June last year as a joint venture between Industrial Investment Group (IIG) and the AIM listed Merchant House Group plc (See August 06 edition of the LeasingWorld magazine).
“IIG was founded in 1994 as a traditional finance broker specialising in middle ticket transactions and the establishment of ‘Captive Finance’ programmes” states John Lutterloch – founder of IIG and Chairman of MHF.
“Our business grew steadily in the early years with increasing levels of fee income and a small leasing portfolio. Through our programmes we were able to cherry pick around £15 million of leasing assets for own book and these transactions have all proved extremely profitable. However, like other small Lessors, our ability to write more has always been restricted by the size of our balance sheet and the level of debt available” claims Lutterloch.
IIG has considered a number of external fundraisings in the past exploring private placements with external institutions and a possible AIM listing in 1999.
More recently, IIG co-founded St Helen’s Finance plc which raised £0.75 million as a ‘new start’ company and listed on PLUS markets in 2004.
“The experience gained over the years has given us a valuable insight in both fundraising and flotation” says Lutterloch, “and our joint venture with Merchant House Group has enabled us to develop these skills further and offer our client base a wider range of equity and asset finance options”
One such example is Pinnacle Plus Ltd, which manages the airport vehicle movements of a number of major airlines.
MHF recently completed a €500,000 refinancing for Pinnacle which has now appointed Merchant House Group plc as its advisor with a plan to increase further the capital base of the company to finance the company’s expansion programme.
MHF’s growth strategy has been to seek a number of strategic partnerships with other companies who are experts in their field in order to offer a ‘one stop shop’ for fundraising.
These include The Evans Partnership (aircraft and shipping), Burdett Capital Partners (funding of major infrastructure projects) and Star Elite Capital, a Beijing based finance house with capital and debt structures for transactions in the Far East and China.
MHF has also attracted a number of senior executives from the leasing and asset finance industry who are all share in the company’s vision for this new breed of finance intermediary.
Phil Betts and Vince Bull joined the company when the JV was formed last year and MHF has recently been joined by Barry Briggs (former founder and chairman of Technology Group) and Paul Brown, who was also a senior officer of TG before it was sold to Rutland Trust in 1997.
Barry Briggs, who is in charge of special projects including portfolio acquisitions, comments “Like John, we have also been involved in a series of business growth strategies combined with an eventual exit route. The link with our corporate finance colleagues at MHG has increased our scope and is already generating exiting opportunities”
MHF has also taken a 20% shareholding in Wright International Marine Finance (WIMF) and has appointed Peter Curtis as Managing Director. Curtis has spent 20 years in the industry and has held senior positions with Barclays, Nikko, Syscap and more recently Capex Ltd. WIMF is the Captive Finance arm of Wright International Ltd who are major ship brokers with over 600 vessels currently for sale.
“We have worked with Peter Curtis on a number of successful transactions over the years and I am delighted to welcome Peter in to our Group”. says Lutterloch.
Peter Curtis comments: “John must be the most experienced captive operator in the Leasing business, and the chance to team up with him and Merchant House Group PLC was too good an opportunity to miss”
According to Lutterloch there has been a major shift over the past 5 years in the dominance of broker introduced business, and he sees this as an important period to build up a ‘foot print’ in the industry. He also believes that more and more small leasing businesses will be for sale in the next few years and is building MHF to be in a position to acquire some of these companies”
The recent developments at MHF appear to put them on target for their planned AIM listing in 2009. A number of leasing companies have already chosen this route in recent months and the investor market, once again, appears to recognise our industry as sound growth sector.