In recent years, Invercargill Passenger Transport has reassessed its direction. Not just the type of business it would pursue, but also the financial partner to have along for the ride.
Invercargill's Tony Baas said that the company's 178 buses mainly service business and corporate contracts. He said, "We've got major school bus contracts, and corporate contracts with blue chip companies. For example, we have a 10-year agreement with NZ Aluminium Smelters."
At the time the company started talking to GE, it had taken the decision to scale down a tour bus operation run from Christchurch. "The overheads were too high," recalls Tony, "so we looked at our strengths and decided to concentrate on them. But we needed a financial partner who understood the changes we wanted to make, and that's what we found in GE."
Tony said, "GE looked at the value of our bus fleet and the value of our long-term contracts. They were far more flexible than other finance sources we had dealt with. They appreciated that at the time we were asset rich, but the structure of our finance left us with some cash-flow challenges. So they came to the party with a cash flow injection and a payment structure which made life much, much easier for us."
Tony added that GE people demonstrated greater understanding of the bus industry and took a genuine interest in the business. "That really helps", he commented.
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