Paragon Banking to sell vehicle and fleet subsidiary SFS for £85.6m

(Sharecast News) - Paragon Banking Group said on Monday that it has agreed to sell subsidiary Specialist Fleet Services Limited (SFS) to NRG Fleet Services for £85.6m. The deal, which includes the settlement of SFS' intra-group debt, is expected to complete next month.

At 31 March, SFS' net assets stood at £10.1m and the balance of intra-group funding was £33.2m.

Paragon said the sale will add around £40m to its tangible net assets and 0.5% to the company's CET1 ratio.

Paragon bought SFS through its acquisition of Five Arrows Leasing Group in October 2015. It is a specialist business within Paragon's commercial lending division, focusing on municipal vehicle support and leasing to local authorities as well as private waste operators.

Chief executive Nigel Terrington said: "NRG is one of the UK's premier specialist fleet management companies and we believe being part of NRG will support SFS in reaching its true potential. At the same time it will simplify Paragon's operational platforms and the additional capital created will be used to continue supporting growth in our commercial lending division.

"We thank managing director, Bob Sweetland, and his team at SFS for their contribution over the last eleven years and we wish them continued success for the future."

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