Download Correspondence from the Chief Executive of the

19 Eastbourne Terrace
London W2 6LG
The Green Deal
Finance Company
16th January 2017
Dear Ms. Hillier,
Sale of the Green Deal Finance Company (GDFC)
Following the discussion at the Public Accounts Committee evidence session on
llth May last year, I thought you would want to know that we have just completed
the sale of the GDFC's subsidiaries containing its assets and business to Greenstone
Finance and Ai.Jrium Capital for £40m. I am attaching the GDFC's media release for
your information.
It has been a complex and difficult transaction to complete but we are delighted with
the outcome. At completion, all the drawings under the GDFC's senior loan facility
from BEIS {standing at £20m) were fully repaid. The GDFC will be recapitalised with
private sector funding and relaunched. It expects to begin selling finance within the
next two months, so there is a good prospect that everything the GDFC and DECC
worked so hard to achieve may yet come to fruition.
I understand that BEIS will be writing to your formally to confirm the sale and sale
details. Of course if there are any further details that you would like from the GDFC's
perspective I should be delighted to help.
With best wishes,
~iw
Yours sincerely,
Mark Bayley CBE
Meg Hillier
Chair of the Public Accounts Committee
House of Commons
Westminster
London SWlA OAA
att
The Green Deal Finance Company Limited (Company Number 07980777) Registered in England, registered office: c/o Hackwood Secretaries Limited, One Silk Street, London, EC2Y 8HQ Media release
For immediate release
lSth January 2017
The Green Deal
Finance Company
Sale of the GDFC for £40m
The Board of the GDFC is delighted to announce the sale of its wholly-owned
subsidiary, GDFC Services Limited ('GDFC Services'), to Green Bidco No 1
Limited, an independent acquisition company jointly owned by Greenstone
Finance Limited ("Greenstone") and Aurium Capital Markets ("Aurium") for a
total consideration of £40m. The sale is the culmination of a process that saw
expressions of interest from 14 separate parties in buying or investing in the
GDFC. As part of completion of the sale, the GDFC has repaid in full the
outstanding amount of £20.2m drawn under the senior loan facility from the
Department for Business, Energy and Industrial Strategy.
The purchaser has acquired GDFC Services and its subsidiaries, which own and
operate the GDFC's pay-as-you-save loan administration system, and the
GDFC's loan book of Plans, which currently amounts to £43.Sm. Existing Green
Deal Plans will continue to be administered as normal by GDFC Services. There
will be no impact on existing Green Deal plan customers and no need for them
to do anything.
David Brent, Chairman of the Green Deal Finance Company said:­
"I and the rest of the Board of the GDFC are delighted that, following the
announcement by the Government in July 2015 of its decision not to provide
further funding for the GDFC, we have completed the sale of the company to a
buyer who intends to re-activate the GDFC's pay-as-you-save lending activities.
The sale shows the significant value of the pay-as-you-save system the GDFC
developed. With the right backing it has the potential to fulfil the
environmental and energy efficiency objectives set out by the Government and
the GDFC's other stakeholders when the GDFC was first established.
I would like to take the opportunity to thank Paul Williamson, Managing
Director of the GDFC, and his team for diligently running the business while the
loan book has been in run-off and for supporting the sale process so effectively.
I also thank Mark Bayley and all the previous management and staff at the
GDFC who worked so hard to establish the GDFC in the face of a number of
challenges. Thanks are due as well to our colleagues at the Department for
Business, Energy and Industrial Strategy who have provided invaluable support
to the sale process."
2
Notes to editors
1. The Green Deal Finance Company is a not-for-profit company. It was established
to set-up, finance and administer Green Deal finance plans on behalf of Green
Deal Providers within the Green Deal framework set up by the previous Coalition
Government.
2. On 23rd July 2015, the Government announced its decision not to provide further
funding for the GDFC to enable it to continue building demand. The GDFC ceased
quoting for new Plans with immediate effect, reduced the size of its staff, and put
the loan book of Plans into "run-off" administered by a small team led by Paul
Williamson, Managing Director. In run-off, Green Deal finance plan repayments
are collected over the term of the plans and applied to repaying the GDFC's
borrowings raised to fund the plans.
3. The GDFC's loan book currently amounts to £43.8m . As a result of the pay-as­
you-save mechanism, the emerging evidence is that, as anticipated, the
underlying level of customer default in Plan repayments is as low or possibly
lower than original expectations in setting up the GDFC, notwithstanding the high
level of financial inclusion within the GDFC's lending policies up to July 2015.
4. Following the Government's announcement in July 2015, the GDFC received 14
separate approaches from parties looking to buy or invest in the GDFC. The GDFC
conducted a formal sale process during 2016 which has culminated in the sale of
GDFC Services and its subsidiaries to Greenstone and Aurium.
5. Greenstone Finance was set up by Kilian Pender in August 2015 and is a private
company backed by a consortium of investors. Greenstone Finance invests in
financing for renewable energy and energy efficiency products with the aim to
become the leading finance provider to UK homeowners, landlords and SMEs
wishing to save money and improve their properties through energy efficiency
products. For further information please see www.greenstonefinance.com .
6. Aurium is a London based investment manager which specialises in asset backed
finance with a particular focus on renewable energy and related infrastructure.
For further information please see www.auriumca pital.com .
7. Greenstone and Aurium have stated their intention to commence the financing of
new Green Deal loans in by the end of the current quarter.
8. The GDFC sale process was led on behalf of the Board by Mark Bayley, former
Chief Executive of the GDFC, and Victoria Wilson, General Counsel.
Media enquiries: Jonathan Haslam, Haslamedia: 07779 708542; [email protected]
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