--- title: "The debt crisis facing the former M&S boss’s car leasing company" publisher: "Stockmark.IT" author: "Stockmark.IT Website" published: "2024-06-24T04:12:04+00:00" modified: "2024-06-24T04:12:04+00:00" date: 2024-06-24 canonical: "https://stockmark.it/the-debt-crisis-facing-the-former-ms-bosss-car-leasing-company/" category: "Automotive" categories: ["Automotive", "Electric Vehicles"] image: "https://i0.wp.com/stockmark.it/wp-content/uploads/stencil.default-2024-06-17T065434.536.jpg?fit=1200%2C800&quality=89&ssl=1" format: "news" language: "en-GB" --- # The debt crisis facing the former M&S boss’s car leasing company **Published:** June 24, 2024 **Author:** Stockmark.IT Website **Categories:** Automotive, Electric Vehicles **Featured image:** ![White Toyota Corolla hybrid sedan parked at night. from Stockmark.it](https://i0.wp.com/stockmark.it/wp-content/uploads/stencil.default-2024-06-17T065434.536.jpg?fit=1200%2C800&quality=89&ssl=1) --- The motor leasing company headed by Lord Stuart Rose, a retail veteran, is in debt due to the slumping prices of second-hand electric vehicles. Moody’s has placed Zenith Automotive – owned by the private equity company Bridgepoint – on debt downgrade alert due to its financial concerns. The Leeds-based company is one of Britain’s largest independent fleet managers. It owns and manages more than 170,000 vehicles, including electric vehicles (EVs), for clients such as Travis Perkins. Zenith bondholders are worried about the future value of their vehicles due to the recent drop in EV prices. Prices of second-hand electric vehicles have fallen over the past few months, as manufacturers such as Tesla reduced prices and rental and lease vehicles flooded the market. The fall in prices may be good for drivers but not so for the companies leasing EVs, as they probably paid higher prices for the vehicles and could therefore recoup a smaller amount of their investment. Auto Trader figures last year show that a used electric vehicle costing £50,000 will lose £24,000 in value over the next three years. Petrol cars lost an average of £17,000 in the same time period. Moody’s reviewed Zenith’s bond last week for downgrade, citing “high debt and weak capitalisation”, compounded by EV’s volatile market. The rating group will evaluate Zenith’s plans and then decide whether or not to reduce the rating by a notch. Zenith’s growth strategy has made EVs a key component. It pledged to “decarbonise UK vehicle parcs by eliminating tailpipe emission”. Zenith does not need to refinance any of its debts, and it has approximately £100m in cash that it can use. However, the group borrowed £1bn worth of loans. It also owes £475m to bond investors. In recent months, the issue has caused the bond market to panic and send prices of Zenith debts sharply down. The £475m group bond, which is a key indicator of the health of the group, has dropped to 65p per pound, down from 80p six-months ago. A Bridgepoint Zenith spokesperson denied that there was a crisis of debt at the group. He said: “It already has facilities in place, and the Moody’s report acknowledges that the company does not have any imminent funding needs.” Zenith was acquired by Bridgepoint, the former owner of Pret a Manger for £750m. Lord Rose was appointed Chairman in 2017. He is the chairman of Asda, and a former chief executive at Marks & Spencer. Zenith may need to act to maintain the markets’ support, even though it has a B1 credit rating. This means that the group’s debt is stressed, not distressed. Zenith could reduce pressures by pledging additional capital or stopping dividend payments, according to a bond investor. They need to change their story and restore investor confidence. “This is a warning that they can’t continue to operate the way they did,” they said. --- **Original URL:** https://stockmark.it/the-debt-crisis-facing-the-former-ms-bosss-car-leasing-company/ *Created by [WP Markdown Endpoint](https://wpmarkdownendpoint.com/)*