Deals and IPOs

Promise, Acom Seen Bidding for GE's Lake


Japanese consumer lenders Promise and Acom are probably among the bidders for General Electric's consumer loan business in Japan, sources familiar with the matter said on Thursday.

GE has asked potential buyers to submit preliminary bids by Monday, as part of the U.S. firm's plan to unload its consumer lender called Lake, said the sources, who declined to be identified.

The Japanese securities arm of UBS AG will serve as financial adviser, the sources said.

An official at Acom declined to comment, as did a UBS spokeswoman in Tokyo. No one was immediately available for comment at Promise.

A spokeswoman at GE's consumer finance unit in Tokyo said, "It is too early to talk about specific details regarding the sale of the Japanese personal loan business."

GE said in a regulatory filing in September it was actively looking for a buyer and expected to complete the sale of Lake by the end of the third quarter of 2008.

The U.S. company said it expected a loss of up to $1.1 billion related to exiting the business. Promise, Japan's largest consumer lender by market capitalisation, is about 21 percent owned by Sumitomo Mitsui Financial Group, the country's third-largest bank.

Acom, the No.2 consumer lender by market capitalisation, is about 13 percent owned by Mitsubishi UFJ Financial Group, Japan's largest bank.

Consumer lenders have seen their profits dwindle under new regulations lowering the maximum interest rate they can charge.

They have also been forced to repay previous interest charges that were deemed illegally high and to increase their reserves against legal claims.

The stricter regulations pushed many firms deep into the red, leading them to cut jobs, scale down and in some cases seek outside financial help.