Former Addison Lee chief races to assemble rescue bid
Liam Griffin, the former Addison Lee chief executive, is racing to assemble a rescue bid for London’s second-biggest minicab operator that would leave its lenders nursing heavy losses.
Cab4Now.com has learnt that Mr Griffin, who stepped down from the helm of the company in 2015 but remains on its board as vice-chairman, has approached a range of investment funds in recent weeks about backing a takeover.
If successful, a bid would return the son of Addison Lee’s founder, John Griffin, to the top of the company at a time when its future looks increasingly uncertain.
City sources said this weekend that the younger Mr Griffin had submitted a provisional offer of about £125m for Addison Lee in the last fortnight, although his proposal has yet to secure all of the required funding.
A takeover at that sort of level would leave the lenders to Addison Lee, which are led by the Dutch bank ING, facing big losses on their estimated £230m of upstanding debts.
Insiders said that the lending syndicate had been persuaded to inject a further £20m of financing into the company in recent weeks as it tries to find a buyer prepared to take it off the hands of The Carlyle Group, its private equity owner.
Addison Lee, which has been fighting a long-running battle with Uber Technologies for dominance in the capital’s private-hire market, is understood to be targeting a rescue deal by the end of the year.
“The new funding has been made available to buy the business some time,” said a source close to the process.
It was unclear this weekend whether Mr Griffin would ultimately be successful in his efforts to regain control of Addison Lee.
His father founded the company with just one car in 1975 and grew it into an empire boasting a fleet comprising thousands of vehicles.
One option would be for Carlyle to hand the keys of the company to a new owner.
A pre-pack administration, which has been under consideration by Carlyle and the lenders, is thought to be complicated by the potential need to reapply for its Transport for London (TfL) operating licence if an insolvency event occurs.
Cerberus Capital Management, the American hedge fund, is thought to have been among the other prospective suitors for Addison Lee although sources indicated this weekend that its interest had waned.
A person close to Carlyle insisted that there remained “multiple” parties in the sale process.
However, all the offers are expected to value the company at well below its £230m of outstanding borrowings.
Addison Lee, which has been owned by Carlyle since 2013, is due to repay about £200m to lenders next spring.
The company has a direct workforce of about 1,000 people and about 5,000 drivers registered on its books.
Cab4Now.com revealed in October that a syndicate of more than a dozen banks led by the Dutch financial giant ING had drafted in advisers from Alvarez & Marsal (A&M) to consider their options during the minicab operator’s auction.
The accountancy firm Deloitte is working alongside Rothschild on the sale process.
While valuations as high as £800m were suggested earlier in the year, fierce competition from ride-hailing apps including Uber and the patchy performance of Addison Lee’s US business have contributed to substantial losses at the British company.
Bankers are said to have raised the idea of a break-up of its operations in an effort to smooth the path towards a sale.
Its UK business is understood to generate cash but the group’s financial performance has been hampered by its results elsewhere.
In its results for the year to August 2018, Addison Lee posted a 13% increase in revenues but recorded pre-tax losses of almost £39m, up from £20.8m a year earlier.
It said it had grown revenues by 47% over a three-year period “in an incredibly competitive market”.
Addison Lee says it transports more than 10 million people in London alone each year, giving it a market share of roughly 10%.
Its travails have deepened even as Uber faces a fresh legal battle to secure a new London licence.
Last month, it was deemed by TfL not to be a fit and proper holder of a private-hire licence for the second time in little more than two years after it emerged that thousands of Uber journeys had been made using drivers who were not licensed by the company.
Uber is to appeal against the regulator’s ruling.
Carlyle and Addison Lee declined to comment, while Mr Griffin could not be reached.