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Sources say Lookers owners are fishing for fresh funds to refinance buy-out deal

  • Lookers’ new owner Global Auto Holdings looking to refinance its debt
  • Canadian firm borrowed cash from three banks but that deal expires this year
  • Redundancies and other cost cuts are said to be linked to need to refinance
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Time 6:32 am, January 26, 2024

Lookers and its new owners Global Auto Holdings are believed to have held a series of meetings with lenders to raise fresh funds. 

Talks with financial institutions – including private equity firms and banks – are understood to have taken place as the new owners look to refinance the punishing 12-month loan it used to buy the business.

As part of the deal, it is believed Global Auto Holdings (GAH) may have to combine its successful Canadian operations with the recently acquired Lookers business to leverage better terms.


Lookers and GAH refused to comment when contacted several times by Car Dealer.

GAH bought out Lookers in a £504.2m deal with funding from three Canadian banks which is believed to expire a year after the acquisition was sealed.

Bank of Montreal, Fédération des caisses Desjardins du Québec and National Bank of Canada combined to lend Global Auto Holdings $615m for the acquisition.


‘The terms of the original loan from the three banks was on a one-year term and it was always going to have to be refinanced, but with the market dipping in the UK it looks like it’s proving harder to do than they thought,’ said a source.

‘That’s likely the reason for the major redundancies Lookers has announced already as it looks to save cash. The interest payments will be punishing to its bottom line.’

Lookers made £84.4m pre-tax profit in 2022 on revenues of £4.3bn. Interest payments of 10% on the original loan would equate to £50m a year, wiping a huge chunk of Lookers’ annual profit out.

Mike Jones, automotive consultant, said: ‘Profitability has undoubtedly dropped off significantly for most UK motor retailers following the heady heights of the post-Covid profitability records. This, combined with the increases in interest rates, have made it more challenging for many businesses seeking to refinance.’

Since the takeover, Lookers has announced a swathe of redundancies, with some 14.5% at risk of losing their jobs. Staff have complained about how the process has been handled with many saying they feel they have been treated ‘terribly’. 

S&P Global Ratings issued a note earlier this month that warned GAH’s plans ‘creates some near-term execution risks’. The ratings agency also believes that Lookers will achieve $100m in annual savings thanks to its current headcount cuts and other ‘cost controls’.

Global Auto Holdings is owned by Kuldeep Billan, the founder and executive chairman, who runs Alpha Auto Group in Canada. 

It operates 15 dealerships in Canada and the US and says it is one of the largest in Canada as measured by EBITDA profit. AAG turned over $1bn in 2022 and made profits of $100m.

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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