Element Financial splits into Element Fleet Management and ECN Capital

On October 3, 2016, Element Financial Corporation completed a butterfly reorganization by way of plan of arrangement pursuant to which the business was split into two separate companies: Element Fleet Management Corp. and ECN Capital Corp.

Element Fleet (TSX: EFN) is an $18-billion company operating in the fleet vehicle management market, led by Chief Executive Officer Bradley Nullmeyer (Element Financial’s former President). ECN Capital Corp. (TSX: ECN), led by Steve Hudson (Element’s former CEO), now operates the $8.2-billion commercial and vendor finance, aviation finance and rail finance business previously conducted by Element Financial. The separation transaction received approval from 99.5 per cent of Element’s shareholders at a special shareholders’ meeting held on September 20, 2016. As part of the separation of the two businesses, Element Fleet amended and restated its US$3.5-billion credit facility and ECN Capital established a new US$2.5-billion credit facility.

The spin-out was overseen by Element Financial’s General Counsel, Jim Nikopoulos, with advice provided by a team from Blake, Cassels & Graydon LLP including David Toswell, Jeff Trossman, Shlomi Feiner, Paul Stepak, Paul Singh, Mike Hickey, Peter Lee, Jacob Gofman, Saktish Pillai, Josh Whitford, David Colman, Eric Richmond, Jeremy Ozier and Sabrina Radia-Bramwell. Cravath, Swaine & Moore LLP provided US advice with a team led by Erik Tavzel and Len Teti.

The new banking arrangements were overseen by Element’s Treasurer, Karen Martin, with advice from a Blakes team comprising Peter MacGowan, Jennifer Hancock and Leila Yacoubi, with the lenders advised by a team from Dentons Canada LLP led by Dennis Wiebe.