BOSiF portfolio up for grabs

BANK of Scotland’s multi-billion pound Integrated Finance portfolio has been put up for sale, it emerged today.

TheBusinessDesk has learned that investment bank NM Rothschild has been mandated to either find a buyer for the entire unit, or sell the individual businesses, which in Yorkshire includes the £783m buyout of Doncaster-based construction and regeneration group Keepmoat in August 2007.

In the North West it backed the £225m buyout of Ainscough Cranes.

Observers believe the assets in the portfolio are worth around £5bn. BoSIF’s parent company HBOS recently merged with Lloyds TSB to create the Lloyds Banking Group, which is owned 43.4% by the Government.

The management of the new bank is said to be under pressure from the government to reduce its exposure to more speculative areas and instead focus on helping small and medium-sized businesses weather the recession.

BOSiF, which was particularly active in the North West, provided both debt and equity to managers to lead leveraged buyouts.

None of the businesses it owns in the North of England are seen as risky investments, unlike some other parts of the portfolio, housebuilder Crest Nicholson and retirement homes specialist McCarthy & Stone, which both have high debt levels to service, but are experiencing falling sales.

If the businesses are sold off individually it is in unlikely HBOS will recoup what it paid for the assets in more favourable marker conditions.

One insider told TheBusinessDesk: “Ainscough Cranes is a perfect example – although it’s trading OK despite the problems the construction sector is facing, BoSIF paid £255m at the top of the market for it – and would never get its money back now.”

Corporate financiers believe potential buyers of the whole portfolio could include Vision Capital, Coller Capital and Landmark Partners, which all specialise in buying private equity secondaries.

A spokesman for Bank of Scotland Corporate refused to comment.