GE Sells U.S. Hotel Franchise Portfolio Along With Canadian Hospitality And Restaurant Industries Financier
General Electric Co. will sell its GE Capital's U.S. hotel franchise loan portfolio to a Western Alliance Bancorp unit. This includes current loans of about $1.4 billion and will give real estate financing of limited service hotels to owners.
GE will sell its GE Capital's U.S. hotel franchise loan portfolio and its other business that provides financing to hospitality and restaurant industries of Canada. The unit costs about $300 million of loans wherein the company will gain company $200 million from the agreement expecting to close by the second quarter. Both businesses govern a large part of GE Capital's franchise finance unit. It would be the last North American business to be sold as part of the move of cutting down GE Capital's size, as reported by the Business Insider.
"We're pleased to sell the U.S. hotel portion of our Franchise Finance business to Western Alliance, a fast growing bank that is committed to the business, customers and employees," said Keith Sherin, GE Capital chairman and CEO. "Combined with the sale of our Canadian Franchise business, this represents a significant portion of Franchise Finance, our last North American business to be sold as part of our plan to significantly reduce the size of GE Capital," he added.
When the transactions become complete, it will contribute roughly $0.2 billion of capital to the total target of almost $35 billion of dividends to be paid to GE which is subject to regulatory approval, FinanzNarichten.de reports.
General Electric is considered as the world's Digital Industrial Company, changing industry with software-defined machines and solutions that are linked, sensitive and predictive. The company is organized around a worldwide exchange of knowledge called the 'GE Store' where business shares and penetrate the same technology, intellect, structure and markets, according to the Morning Star.
GE will have Barclay as its financial adviser for both transactions while Hogan Lovells will be the legal adviser for the U.S. hotel transaction and for the Canadian transaction, McCarthy Tétrault LLP will provide legal advice.