It’s been a long time since the international climate for computer leasing has been in a worse state – certainly not since the Itel crash at the beginning of the 1980s – and, even without spectacular failures like that of Atlantic Computers Plc over here and Continental Information Systems Inc in the US, external factors are making the going extremely tough for independent leasing companies. In Europe, Meridian International is frantically drawing in its horns, and the supply of money to keep the wheels oiled is beginning to dry up. When Honkers and Shankers – Hong Kong & Shanghai Banking Corp Ltd – cosied up to Midland Bank Plc a couple of years ago, it was seen as a saviour for the debt-ridden British bank, but now Hong Kong & Shanghai has as many problems of its own, and the expected conversion of the 14.9% stake in Midland into a full merger under a new UK holding company begins to look like two tottering drunks collapsing into each other’s arms to avoid falling over. With more provisions last year from Honkers & Shankers’ Australian subsidiary, from its Marine Midland Bank in the US and at Midland Bank here, the company now has to contend with substantial loan exposure to crashed British & Commonwealth Plc. Enough to turn the company away from any contact with computer leasing in any context – but Marine Midland’s Concord Capital subsidiary is a major source of finance for leasing companies in the US. Already Concord is too uncertain about the likely life of IBM’s new 3390 disk drives to put up money for them, and its ultimate parent’s financial woes are likely to lead it to dry up as a source of computer lease finance altogether. At first blush, all this would suggest that IBM Credit Corp would find itself in an enviable position to abuse its monopoly – but even IBM may not want to take all the business on offer onto its books. And there could soon be new benficiaries of what presently looks a very bleak situation. AT&T Co has made no secret of the fact that it is keen to recycle some of its vast cash flows from long-distance into the computer leasing business, and there is a very dark horse just over the horizon from the Land of the Rising Sun. Japanese financial institutions have been following their manufacturing clients onto the world market in droves, and the next name to make a big impact on the world financial scene could well be the unfamiliar one of Orix Corp – unfamiliar not least because the Tokyo company is still much better known under its old name of Orient Leasing. IBM Credit could well find that it has swept all the pawns off the board and sidelined the bishops and knights only to expose a couple of queens.
