No Word On Sale of Autoland
It’s been six months since the NCUA put Telesis Community Credit Union’s stake in Autoland Inc.’s up for sale, but the agency is mum on where the bidding process now stands.
With an initial goal of completing the transaction by the end of 2012, the regulator is not providing any new, concrete details on the status of those entities that have placed bids on securing a slice of the auto buying CUSO.
“We are working to finalize the sale, and we’ll have an announcement when that process is complete,” the NCUA said in an Oct. 30 statement to Credit Union Times.
Since June 1, the date that Telesis of Chatsworth, Calif., was liquidated and its assets purchased by the $1.3 billion Premier America Credit Union, also in Chatsworth, a number of entities initially expressed interest in Autoland, the NCUA said in August.
A few final serious bidders were being considered at the time as the price and terms continued to be negotiated in order to ascertain the final bidder and value received, the agency noted.
In August, Credit Union Times learned that one of the bidders in the running as a top contender was a billion-dollar credit union in California. When provided with the name, the NCUA did not confirm if the cooperative was indeed the final bidder being considered.
In mid-June, Auto Solution Inc., a vehicle brokerage firm that works with more than 300 credit unions in Oregon, Washington and the Northwest, put in a bid to buy a portion of Autoland. Mark Loebner, owner of ASI, said the company’s request was rejected by the NCUA because the agency wanted to keep the bids limited to credit unions and CUSOs.
When contacted on Oct. 30, Loebner said he had not heard anything new and expressed dismay on the lack of nondisclosure by the NCUA on the bidding process.
In a Sept. 6 letter to Lawrence Reichman, an attorney representing Loebner, NCUA General Counsel Michael McKenna reiterated the agency’s position on restricting bidders to credit unions and CUSOs.
“We viewed that strategy as yielding the highest return and being in the best interest of the credit union industry,” McKenna wrote at the time, adding the Federal Credit Union Act gives the NCUA, as liquidating agent, broad discretion in determining how to dispose of the assets of a failed credit union.
Formed in 1971, Autoland became a credit union-owned entity in 2007 through Telesis and two other California cooperatives, the $3 billion Kinecta Federal Credit Union in Manhattan Beach and the $29 million California Agribusiness Credit Union in Buena Park, through CU Vehicles LLC.
On Sept. 25, Autoland said a sustained demand for new cars helped it post positive earnings through August. The CUSO said it also experienced a 25% sales increase from the same period in 2011 while net profits exceeded last year’s profitability by 99%.