Boxclever blow for Saunders

By JIM ARMITAGE
Updated:

 

LARGE divisions of Boxclever, the television rental company at the heart of German bank WestLB's financial crisis, were plunged into administration today in a further blow to the reputation of former City wunderkind Robin Saunders.

WestLB called in PricewaterhouseCoopers as adminstrative receivers to the Boxclever divisions collectively known as Endeva, providing servicing, logistics and call centre support to the core rental operation.

The decision comes just days after it emerged that private equity house Alchemy was plotting a bid for the whole of Boxclever, which has forced lender WestLB to make bad debt provisions of e650m (£450m).

The State-owned bank loaned Boxclever £748m through a disastrous bond issue arranged by WestLB and announced by Saunders, the glamorous head of its Principal Finance Division.

Saunders has since distanced herself from the deal. But the losses played a large part in the resignation of WestLB chief exec Jurgen Sengera and a scathing attack on the provincial bank's naive lack of risk management by German regulator Bafin.

Although the core rental business remains untouched by the move, it could complicate any potential bid from Alchemy, which is thought to be working with the company's chief executive Roger Mavity on a £200m management buyout.

When WestLB first got involved in the merger of Radio Rentals and Granada's rental business, which created Boxclever, it hoped the Endeva businesses would grow by providing out-sourced services to other TV and video retailers and private householders.

Endeva's revenue and profit growth was expected to counter the anticipated long-term decline of the core rental operations. But it proved unable to meet its targets and triggered the group's current debt crisis.

A standstill agreement was struck in July, whereby WestLB and other backers agreed to continue providing working capital while a restructuring was arranged.

That agreement expired on Monday, though WestLB sources said the appointment of PWC represented the solution they had been seeking.

PWC will continue running Endeva while looking to strip out costs and find a buyer. Meanwhile, Alchemy could still come in with a bid for the core operations.

Saunders, currently facing allegations about her private life, was part of today's decision, although the senior executive in charge was Manfred Puffer, the WestLB board executive appointed to clear up the Boxclever mess after Sengera quit.

Meteoric rise to fame and fortune

ROBIN Saunders' meteoric rise to fame and fortune has spread far beyond the fusty confines of the City - culminating this week with salacious details of her out-of-work friendship with celebrity chef Marco Pierre White.

Meanwhile, her imminent departure from the board of Bhs brought more unwanted attention for the banker who rocketed to City stardom with her audacious 1999 rescue of Bernie Ecclestone's Formula One.

She led WestLB's $800m (£480m) buy-in of a majority of a $1.5bn bond issue, later saying of Ecclestone: 'My team and myself put together a plan for this man to become a billionaire overnight.'

A string of equally high-profile deals over the next three years amassed her a personal fortune estimated at £25m as she co-invested alongside several of the mega buyouts financed by the WestLB Principal Finance Division she headed.

Last year she became the country's new-found financial darling over Wembley Stadium when she led the German bank's £757m redevelopment deal.

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