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A unit of GE Capital, the financial services subsidiary of diversified manufacturer General Electric Co., announced today (Sept. 16) that it intends to buy the RV dealer inventory finance business of Deutsche Financial Services (DFS), along with certain other commercial inventory finance businesses of DFS.
The Vendor Financial Services (VFS) division of GE Commercial Finance intends to buy the DFS businesses for $2.9 billion in cash and debt repayments.
The transaction is expected to close during the fourth quarter and is subject to customary closing requirements and government regulatory agency approvals.
In addition to the RV dealer floorplan finance business, VFS plans to buy DFS’ industrial equipment and technology products dealer inventory finance businesses.
VFS is not buying DFS’ manufactured housing and consumer finance businesses.
DFS is a major source of RV dealer floorplan financing.
Germany’s Deutsche Bank AG is the parent of DFS. The German bank, reportedly, was looking to sell a major portion of the dealer inventory finance business of DFS in order to raise cash because it was forced to write-off $234 million in bad loans to telecommunications industry giant WorldCom Inc., which now is in Chapter 11 bankruptcy.
Deutsche Bank also owns 13.4 million shares, or 11.3% of WorldCom’s stock, it reported to the Securities & Exchange Commission (SEC).
In the vast majority of bankruptcy court-supervised restructurings, the holders of common stock come away with nothing.