Recently, GE Capital, one of the largest segments of
General Electric Company
), has seen some success in the United Kingdom and Australia. Over
the last couple of days, GE capital has provided loans worth £220
million ($346 million).
Yesterday, GE Capital provided a loan worth £150 million to
Accolade Wines, the largest wine company in terms of volume in
Australia and the U.K. The financing is expected to increase
Accolade's working capital and fund its capital spending, as the
company plans to increase its international presence.
Accolade is one of Australia's leading wine companies, housing
Australia's Hardys and Banrock Station, South Africas's Kumala and
Fish Hoek and the USA's Echo Falls brands. Accolade, which is owned
by Champ Private Equity (holds 80% stake), is also a distributor to
large retailers such as Tesco and Sanisbury in the U.K. Accolade
also owns a 50% stake in the U.K.'s largest wholesalers of
alcoholic beverages, Mathew Clark.
Earlier, on November 21, 2011, GE Capital granted a loan of £70
million as a senior secured credit facility to Energy Alloys LLC, a
provider of oil field metals and services, to oil and gas
manufacturers and service companies worldwide and especially the
United Arab Emirates (leading oil producers in the world). Energy
Alloys intends to use the fund for growth and meeting its working
GE Capital is the largest division of GE in terms of revenue
(33% of the company's total revenue for fiscal 2010) and has two
sub segments: Commercial Finance and Consumer Finance. These sub
segments together accounted for approximately 80% of GE Capital's
total asset base.
Although GE capital does not have any direct exposure to the
subprime market in the U.S. especially, after the sale of WMC
Mortgage; however it has a huge exposure in credit cards, non U.S.
mortgages, auto loans, commercial business loans, real estate and
Defaults on consumer loans, tighter credit markets and declines
in real estate values impacted the business in fiscal 2010.
Analysts believe that these factors, especially GE Capital's large
exposure to the commercial real estate market will continue to be a
headwind for GE capital's business atleast through the first half
of fiscal 2012. The primary competitors include Ally Financial Inc.
(ALLY-PB), Ford Motor Credit Company LLC and
General Electric currently holds a Zacks #3 Rank, which
indicates a short term (1-3 months) Hold rating on the stock.
GENL ELECTRIC (
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