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Speirs re-enters finance market

Speirs is working with an offshore investment bank to create a new finance business offering funding for vehicles and commercial plant to SMEs and consumers.

Tuesday, July 30th 2013, 10:03AM

The company sold its finance business in 2008.

Under the new venture, it will be responsible for developing markets and providing computer software and systems.

A conditional understanding has been signed.

The investment bank will own the main funding entity for new finance business and provide most of the subordinated debt funding.

Negotiations have been conducted with a New Zealand bank to provide senior wholesale debt funding. There will be no borrowing from New Zealand retail investors.

Speirs will receive fees based on all new loans written and the ongoing performance of the loans.

In return for its software, Speirs will be granted $1 million in subordinated debt and will receive 20% of all future profits earned by the new finance business on a before-tax basis.

Speirs will not be providing direct funding by way of cash to the new finance business at the outset. But it will contribute at least $350,000 in cash by way of subordinated debt in 2014 and re-invest a proportion of the fees it receives in further subordinated debt as the business grows.

It is expected that the various conditions of the understanding will be met over the next few months.

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