Sainsbury's brings SPV in from the cold
Struggling supermarket giant J Sainsbury has bought back a special purpose vehicle, designed to take its IT assets off the balance sheet, in a move it claims will save it £25m a year.
The SPV, which was set up by IT partner Accenture, was created in 2000 in a seven year £800m deal. On top of the £800m J Sainsbury agreed to pay Accenture, it was committed to investing £1bn in IT systems.
The decision to bring the SPV, an off-balance sheet company called Swan Infrastructure, back in house was described by one financial analyst in the Financial Times as ‘the creation of profit by accounting’.
Peter Davis, group CEO of Sainsbury’s said in a statement: ‘We would now like to acquire Swan to create a direct commercial relationship with Accenture, as we near completion of our business transformation programme this summer.’
As part of the deal, Sainsbury’s will pay £6m in cash, take Swan’s £234m debt and exchange £313m worth of bonds to take the £553m of Swan’s assets on to its books.