London Scottish to Sell Debt Collection Division
Robinson Way, the well performing and profitable debt recovery company of London Scottish bank, has been sold as Ernst & Young continued work after being called in to run the now defunct savings provider last year.
With profits of £6.3 million for the prior six months to October 30, 2008, it was always thought that a multitude of parties and private investors would be interested in the debt collection agency based in the Salford Quays, Manchester and a deal has now been struck. While the proposed figure of sale was undisclosed, it is thought that Ernst & Young had slapped a price tag of £100 million on the company.
It was December 1st, 2008 when the Financial Services Authority (FSA) forced London Scottish into administration after the bank had failed to meet capital requirements but it is only now that a deal has been agreed. While interest was high, investors failed to match Ernst & Young’s valuation and it is has now decided to sell to its managers.
London Scottish itself was initially founded over 100 years ago but hd losses of £22.4m in its consumer lending business in the year to October 31, 2007 and impairments mounted by a third to £38.3m.
Also sold was Morses Club, the doorstep lending business to management and RCapital, the private equity firm, in April for an undisclosed sum.
The group has few remaining assets: it has closed most of its branches and sold its office in Manchester, and its Manor Credit leasing business, for £45.2m in 2007 in an effort to raise cash.