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WestLB puts Boxclever arm into receivership

Rachel Stevenson
Thursday 25 September 2003 00:00 BST
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Parts of Boxclever, the television rental company behind the financial difficulties at the German bank WestLB, were put into receivership yesterday, in a further blow to its star investment banker, Robin Saunders, who introduced the company to the bank.

PricewaterhouseCoopers said that it had been appointed administrative receiver for the Endeva Group and other related companies that provide servicing, logistics and call centre support for Boxclever. The arrangement will mean that Boxclever can carry on operating while it is being restructured, with the intention of finding a buyer for the business.

Tony Lomas of PricewaterhouseCoopers, said yesterday his "longer term objective is to restructure the business in order to improve the service to Boxclever". Its options may include "some form of partnering with a financially stronger third party".

It is understood that Alchemy Partners, the private equity firm, is looking at buying the Boxclever business, alongside Boxclever's management, but has yet to come forward with any offer. Boxclever, which was created out of a merger between Radio Rentals and Granada's rental business, contributed to a loss at West LB of €1.7bn (£1.2bn) earlier this year, and forced the bank to make a €650m bad debt charge. This sparked an investigation into the bank and its risk controls by BaFin, the German regulator.

Ms Saunders claims that Boxclever was never part of her Principle Finance division in West LB, although it was introduced to the bank for investment through her. She passed it on to West LB's Structured Finance unit, but did arrange a £748m bond issue to raise debt for the company. When the Structured Finance unit was later disbanded, Boxclever came under Ms Saunders' nominal control.

In an attempt to stave off the decline in the television rentals market, Boxclever branched out, with Endeva and other companies, into providing outsourced services to other retailers and private customers on products such as washing machines and fridges. But the expansion proved to be a drain on capital, rather than a source of growth for Boxclever, leading to a crisis with the company's debt facilities. West LB will continue to provide funding to all of Boxclever's divisions and does not expect to take any additional charges.

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