At last, bankers think out of the Boxclever dilemma

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The Independent Online

An eight-months-long dispute between two lenders to Boxclever, the TV rental business that collapsed last year, has been resolved, paving the way for it to be sold.

A deal to sell Boxclever, which was formed when the Thorn and Granada TV rental businesses merged, for £350m to US investment firm Fortress was agreed in early February. This valued the group at less than half the £860m it owed to its bankers.

The largest lender to Boxclever was WestLB, which had written off more than £400m on its exposure to the business. Those losses brought massive internal ructions in the German bank and led to the departure of high-profile banker Robin Saunders, who headed its private finance unit.

CDC, the French bank, purchased around £130m of Boxclever bonds. It has made £45m of provisions against its exposure. CDC objected to the terms of the sale to Fortress, saying that it meant it would lose too much money. It has dug in its heels since February, but a deal was struck earlier this month which will see some of the money that had been due to go to WestLB being used to compensate CDC.

Fortress has yet to complete its purchase but sources close to the deal are confident it can be completed on terms not too different to those agreed in February. "The business has been performing well in receivership and there are no major issues," said a banker close to the deal.

WestLB has been attempting to sell off Ms Saunders' portfolio of investments. Last month it sold out of Odeon cinemas in a £400m deal. Odeon was bought by Terra Firma, the investment company run by Guy Hands, who was instrumental in forming Boxclever.

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