Major infrastructure deals spearheaded by RBS’s corporate teams so far in 2013 include a £1.6 billion refinancing for port operator the Peel Ports Group, and lead Manchester Airport Group’s £1.5 billion purchase of the UK’s fourth largest airport, London Stansted. The deal allows MAG to build on its position at the heart of Manchester’s Airport City project, an international hub aimed at boosting the city’s global business credentials launched last month by Chancellor George Osborne.
Together the two deals will contribute to the creation of several thousand jobs, including 26 engineering apprenticeships, and bring a host of benefits to communities in Liverpool, Manchester and beyond.
Peel Ports will galvanise Liverpool’s Merseyside area - and by extension the UK’s shipping industry - with a deep sea container terminal expansion project set to create 5,000 jobs. Most of them, including 26 engineering apprentice positions, will be filled by local people thanks to Peel Ports’ link with the Maritime and Engineering College North West.
According to Doug Coleman, Peel Ports’ Liverpool2 programme director, “there is a long-standing relationship between RBS and this business. At the stage where we were considering appointing our financial advisers, RBS stood head and shoulders above others that we were speaking to”.
RBS Managing Director of Secured Debt Markets Alan Parry said: “Financing creates real job opportunities. Some say that banks have no social utility – I absolutely object to that. When banks are at their best that’s exactly what they have. This is a great example of different teams coming together to deliver a coherent outcome for the client.”
Largest UK-owned airport operator
RBS acted as sole debt, risk management and ratings adviser for MAG’s purchase of Stansted, which serves 16.9 million passengers each year. The team also played a lead role among 13 market-leading global banks providing £1.2 billion in debt financing for the acquisition. The deal has made MAG the largest UK-owned airport operator and propelled them forward as a major international contender for future airport acquisitions in Europe.
The Manchester Airport City project is a £650 million, 15-year project next to the airport that will house businesses from a range of sectors including healthcare, IT and advanced manufacturing, alongside up to 2,400 hotel beds. Chris Logan, from RBS’ Manchester-based Corporate Banking team, said: “Airport City is a major business regeneration project aimed at attracting foreign businesses, particularly from China, that will see more airlines using Manchester’s airport..”
Andrew Paulson, of Secured Debt Markets, which is part of RBS’ Markets business, led the MAG deal. He said: “This is a significant deal and a welcome example of a UK corporate buying UK infrastructure. This deal is about a UK corporate aspiring to grow and RBS being the key partner to delivering that aspiration. And it won’t stop here.”
Elsewhere in the region, RBS expertise helped secure funding for the continued growth and diversification of Stockport-based tool and access equipment hire firm Supply UK Hire Shops. Thanks to RBS the firm is set to deliver a 25 per cent increase on their £14m turnover this year and secure a boosted order book over the next two years, taking annual sales to just below £20m.
Biggest lender to SMEs
RBS remains the UK’s biggest lender to small and medium-sized business (SME) and has identified £20 billion in surplus deposits to help bolster small business funding.
Recent examples include NatWest’s help to finance new headquarters and a distribution yard for Massams, a landscaping supply company based at Halsall, West Lancashire. In Cheshire, working with the local NatWest Relationship Manager, RBS helped technology firm Overtec make their first expansion steps to employ more staff and realise a targeted five-fold increase in annual turnover.
In a recent interview RBS CEO of UK Corporate Banking Chris Sullivan said: "We constantly hear that businesses can’t get the finance they need. We have to bridge this gap. With the economy now moving to recovery, it is the right time to have a fresh look at lending, to make sure we are making the right judgements, to challenge ourselves to get better and support even more businesses.”