Bermuda-based fund manager to control mortgage supergroup

In an extraordinary general meeting yesterday, the chairman of an ASX-listed non-bank lender explained how the company stands to benefit from a merger with one of Australia’s mortgage pioneers.

As previously reported by Mortgage Business, the merger of Homeloans Limited and RESIMAC will result in a non-bank lending giant with a total loan book of $13 billion, easily rivalling some of Australia’s smaller banks.

RESIMAC shareholders will hold 72.5 per cent of the merged group and existing Homeloans shareholders will hold 27.5 per cent of the merged group. However, the group’s majority shareholder is actually a fund manager based in the British Overseas Territory of Bermuda.

A September 16 Bermuda Stock Exchange trading update shows that Hamilton, Bermuda-based Somers Limited, a financial services investment holding company, acquired the majority stake in RESMIAC (approximately 79 per cent) from Ingot Capital Management for US$88.5 million ($116.3 million).

“This is a major investment for Somers and fits in with the stated strategy to make corporate investments and acquisitions in the financial services sector,” Somers chairman Warren McLeland said.

“The acquisition of RESIMAC will complement Somers' existing investments and the benefits from the acquisition will accrue to all Somers shareholders,” he said.

“Somers is acquiring a well-run, profitable business which will diversify Somers’ investments and significantly increase the scale of Somers.”

Homeloans chairman Rob Scott confirmed that Somers Limited is RESIMAC's largest shareholder and will acquire voting power of 58.9 per cent of the shares in Homeloans.

Homeloans Limited directors recommended shareholders vote in favour of the transaction, noting that a combination of Homeloans and RESIMAC is expected to generate significant revenue and operational synergies.

“The merged group expects to achieve annual cost synergies of approximately $6 million within 12 to 18 months of implementation of the scheme,” the non-bank said in a statement.

“The larger size of the merged group compared to the standalone size of RESIMAC and Homeloans respectively will enable the merged group to achieve economies of scale through leveraging fixed costs and achieving greater standardisation across the business.”

[Related: Bank sizing up acquisition targets as industry consolidates]

 

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