GE Completes Divesture Of Restaurant Finance Assets In US
Zacks Investment Research | Sep 19, 2016 09:11PM ET
Industrial goods manufacturer General Electric Company (NYSE:GE) has recently completed the divesture of the majority of GE Capital’s restaurant franchise financing assets in the U.S. The assets were sold to three separate buyers.
General Electric sold assets in the Southwest and Southeast to First Horizon National Corporation, a Tennessee-based bank with assets of approximately $27 billion. Assets in the Midwest and part of the West were sold to Wintrust Financial Corporation, an Illinois-based bank with approximately $23 billion in assets. GE Capital assets in the East were sold to Sterling National Bank, a $13-billion-asset holding bank headquartered in New York.
The transactions included about $1.3 billion in ending net investment (ENI (MI:ENI)). Since Apr 2015 to date, GE Capital has inked sale agreements worth approximately $192 billion in ENI, of which it has already completed deals worth $172 billion. By the end of 2016, the company expects to sell $200 million of GE Capital assets across the world.
The transactions are in conformity with the corporate strategy of building a manufacturing-based entity with emphasis on big-ticket items such as aviation engines, drilling machines, generators, medical equipment and scanners. With these restructuring initiatives, General Electric expects operating earnings from the industrial business to comprise over 90% of its total operating earnings by 2018, significantly up from 58% in 2014.
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