- Latitude Group (LFS) and Humm Group (HUM) have mutually agreed to terminate the sale and purchase of Humm Consumer Finance (HCF)
- Both companies cited “the current major disruption in financial markets” as the reason for the termination
- The Board of Humm says it continues to believe HCF is a high-quality business and is planning to review the strategic direction to restore profitability
- However, just yesterday the company released financial figures, highlighting HCF’s decline in receivables
- Shares in Humm Group were down 14.78 per cent to $0.49 per share while Latitude Group was steady at $1.40 per share as of 10:49 am AEST
Latitude Group (LFS) and Humm Group (HUM) have mutually agreed to terminate the sale and purchase of Humm Consumer Finance (HCF).
Both companies cited “the current major disruption in financial markets” as the reason for the termination.
Humm signed a binding, definitive agreement in February to sell HCF to Latitude for a total of $335 million.
The Board of Humm said it continues to believe HCF is a high-quality business and is planning to review the strategic direction to restore profitability.
However, just yesterday the company released financial figures, highlighting HCF’s “very tough” trading environment.
“HCF has experienced a reduction in net receivables, net yield compression and higher expenses,” Chair Christine Christian said.
“As a result, profits are materially lower as compared to this time last year — year-to-date cash NPAT is down approximately 61 per cent. Without enhanced scale, which the Latitude transaction will deliver, the outlook for HCF will be even more challenging.”
In light of the terminated sale, next week’s General Meeting will be cancelled.
The sale of HCF has caused controversy within the company over the last few months, with former Chairman Andrew Abercrombie strongly opposing the deal.
The company has released numerous announcements since February, which stated if the sale did not go through, there would be a fall in the HUM share price.
Shares in Humm Group were down 14.78 per cent to $0.49 per share while Latitude Group was steady at $1.40 per share as of 10:49 am AEST.