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Resimac buys majority stake in NZF securitisation operation in recapitalisation plan

Tuesday 27th September 2011

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Resimac NZ Home Loans, a unit of the Australian non-bank lender, agreed to buy a majority stake in NZF Group’s securitisation operations to help recapitalise the ailing business.

The deal marks the conclusion of due diligence flagged in June that would see an Australian partner take control of NZF’s home lending unit. The sale is subject to shareholder approval, receipt of certain Inland Revenue Department tax rulings and finalising an agreement to protect NZF’s minority rights, the firm said in a statement.

NZF resumed issuing home loans in June after saying it was close to securing a partner for its lending business, which was backed by the $225 million Westpac warehouse facility when it securitised its loan book last year. The lending unit was NZF’s only profitable business in the latest financial year.

Resimac specialises in residential mortgage-backed securities, and was taken over by Duncan Saville’s Ingot Capital Management in 2003. The Australian lender funds more than A$12 billion, according to its website.

In 2009, Resimac courted penny-dreadful stock Allied Farmers, which unsuccessfully took on the Hanover and United Finance loan books. Resimac later backed away from investing in the Hawera-based lender and rural supplier.

Earlier this year, NZF called in the receivers for its deposit taking unit NZF Money, which will have to take a “material charge” on the value of its loan book, according to the receiver’s first report.

The firm reported a loss of $4.8 million for the 12 months ended June 30, as it wrote down the value of bad debts and impaired loans in its property finance arm.

NZF came under fire earlier this year when it elected not to pay cash to investors in its $20 million of NZDX-listed capital notes, instead giving them the option to either roll over the debt into a bond paying a lower interest rate or convert their investment into equity.

About 90% of the notes were rolled over into new bonds, and last traded on July 6 at about 34.8 cents in the dollar.

The shares last changed hands on June 22 at 3.5 cents, and have slumped almost 77% this year.


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