GE is selling about $200-billion of assets as it shrinks the finance arm and refocuses on manufacturing units making heavy-duty products such as gas turbines, jet engines and medical scanners.VINCENT KESSLER/Reuters
General Electric Co. could sell more finance assets in the next three months than the $23-billion (U.S.) unloaded since April as heavy buyer interest accelerates the plan to shed the bulk of its lending operations.
"We're going to pick up the pace in the third quarter," GE Capital chief executive officer Keith Sherin said Tuesday in a telephone interview. "We have a tremendous amount of activity going on in the marketplace. The bulk of the U.S. is in the market and we have quite a bit of Western Europe in the market."
GE is selling about $200-billion of assets as it shrinks the finance arm and refocuses on manufacturing units making heavy-duty products such as gas turbines, jet engines and medical scanners. The Fairfield, Conn.-based company reached deals this week to unload its vehicle fleet-management and European buyout-lending divisions.
GE Capital is in "an active deal review phase" on most North American assets, Mr. Sherin said. The top remaining sale priorities are the health-care and rail-car finance divisions and the U.S. commercial lending and leasing operations, he said.
Since the sweeping GE Capital plan was announced in April, the company reached deals to divest about $23-billion of assets, including the $11-billion U.S. buyout-lending unit. While Mr. Sherin would not specify how much will be sold in the third quarter, he said, "I think we're going to do more than that."
GE was little changed at $26.57 in New York. The shares gained 5.4 per cent this year through Monday, compared with a 4.2 per cent decline in the Standard & Poor's 500 Industrials index.
Mr. Sherin spoke after GE Capital announced an agreement Tuesday to sell its European buyout-finance unit, which lends to private equity firms, to Sumitomo Mitsui Banking Corp. for $2.2-billion. Under the terms, GE will retain its $1-billion investment in the European Senior Secured Loan Programme and European Loan Programme, both joint ventures between affiliates of GE Capital and Ares Capital.
GE also reached a deal to shed the bulk of its vehicle fleet-management business. Canada's Element Financial Corp. bought the U.S., Mexico, Australia and New Zealand operations for $6.9-billion.
"So far, the valuations are in line with our planning," Mr. Sherin said. "We've got very active bidding processes and we're pleased with the outcome of all the things we've signed to date."
GE Capital's joint-venture assets and some banking operations could prove more challenging to sell, Mr. Sherin said. The company is considering spinoffs in addition to traditional sales, he said.
"It's a good time to sell, even with slightly rising interest rates," Mr. Sherin said.