London and Lincoln’s fire engines sold to private equity firm for £2

Brings a whole new dimension to the expression “fire sale”, doesn’t it?

Via New Statesman:

The private company which owns and maintains London’s fire engines, AssetCo, has sold its entire UK business to a private equity firm, AB&A Investments, for just £2 according to the Telegraph‘s Helia Ebrahimi:

The move means that AssetCo, which was the subject of a shareholder revolt in 2011, has shed ties to both the Lincoln and London fire brigades amid mounting losses.

The company said the decision to exit its historic UK business was because the management team believed that operations were “based on a flawed business structure”, which was at the heart of why shareholders had lost so much money.

The effect of the company’s crippling financial issues on its ability to keep critical kit maintained was revealed in May, when the Observer got hold of a report into the company written by the London Fire and Emergency Planning Authority, which warned that:

The overall availability of the aerial fleet continues to be poor because of the ongoing excessive downtimes for maintenance, repairs, fault diagnosis and technical investigations. AssetCo has not yet achieved a maintenance and repair regime for the aerial fleet which brings downtimes within acceptable levels.

The assistant general secretary of the Fire Brigades Union, Andy Dark, has released a statement which argues that:

The foolish decision taken in 2001 to hand over the fire engines to AssetCo was opposed by the FBU. At every stage in this hideous saga, I and my colleagues have witnessed an appalling catalogue of failures.

This latest episode which has seen the fleet sold to another company for a reported £2 is a national scandal. London Fire Brigade serves 7 million people, and we understand that they were simply notified of the decision.

These are public assets over which the London Fire Brigade and the elected politicians have no control. They must be brought back into public ownership under direct local authority control.

Update, 15:05 17/08/12

Commissioner of the London Fire Brigade, Ron Dobson, said:

The sale of AssetCo’s UK interests has no effect whatsoever on the London Fire Brigade or its fire engines, which continue to be maintained and available as usual. I have met with the new owners of AssetCo London, AB&A Investments Limited, and received every assurance that it is committed to maintaining and improving the service the London Fire Brigade receives.

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