NZF home loan deal nearly settled
Listed financial services firm NZF Group says it is close to completing a proposed deal to sell a majority stake in its home loan business to an Australian firm.
Friday, October 14th 2011, 3:54PM
by Niko Kloeten
At today's annual meeting in Auckland, the company said the conditions of the deal with Resimac, which has funded more than A$12 billion in the non-bank lending market, would likely be met by the end of next month.
NZF Group has had a torrid time recently including the collapse of its subsidiary NZF Money, which it put into receivership in July after a failed property transaction.
It made a loss of $4.8 million in the 2011 financial year, following a $4.5 million loss in 2010, and the current year's financial statement will include a loss on discontinued operations of $10.7 million from NZF Money.
NZF Group's mortgage securitisation business is the only part of the company that made money last year.
Chief executive Mark Thornton said, "In my last address in September 2010 I said it had been a difficult year and sadly this has been another difficult year in many respects."
He told the small crowd of shareholders at the meeting that the Resimac deal would work out better for them in the long term.
"A small shareholding in a much larger business will in time eclipse the returns provided by a larger shareholding in a small business," he said.
He said there was a "significant opportunity" to expand in the $173 billion residential lending market, of which about $4 billion (2.3%) was provided by non-bank lenders.
"NZF's share is $170 million so we've got 4.3% of 2.3%," he said.
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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