Resimac makes bid for RHG Limited loan book, formerly called RAMS
Non-bank lender Resimac has made a bid to acquire the loan book of RHG Limited that previously traded as RAMS Mortgage Corp.
The RAMS franchise business was acquired by Westpac in January 2008 and is a separate mortgage lending business to RHG Limited.
RHG Limited informed the ASX yesterday that it had received an approach for a possible “asset-level sale of its loan book”.
“Discussions are not concluded and there are complex transactional and commercial issues involved,” RHG said.
“Our primary objective is to maximise the net worth of the company whilst at the same time ensuring the needs of all of our stakeholders, being our home loan customers, shareholders, staff, service providers and funders are considered and addressed.”
A successful transaction would be in the order of around $150 million, the Australian Financial Review suggested.
RHG has a market value of $143 million.
Sydney-based Resimac, a prominent wholesale non-bank lender, has declined to comment on the mooted bid.
It dates back to 1985 when it was originally created to service and securitise residential loans for HomeFund, a New South Wales State government housing programme under the name of FANMAC.
It was the first Australian lender to issue Australian Residential Mortgage Backed Securities (RMBS in 1988 and since then has issued nearly $12 billion through 18 domestic and international RMBS issues.
RHG continues to operate the loans it originated under the old RAMS brand as a closed, amortising book with its business remaining in wind-down.
It reported net profit of $40.7?million in the year ended June?30, down 45%on the previous 12-month period.
Shares in RHG Limited were placed in a trading halt when the announcement of the approach was first made, but climbed 7.5% higher to 50 cents following a resumption of trading.
They remain at 50 cents this morning ahead of trading.
The loan book acquisition proposal by Resimac was
Any final asset-level proposal would require shareholder approval, and may require third party consents.
The original RAMS business was founded by John Kinghorn, who pocketed $650 million for the sharemarket listing of his mortgage lending vehicle in July 2007, before its dramatic implosion as the GFC pulled the rug from under securitised home loan providers.
