Re: RHG - Rams Home Loans
Jumped on ram's today, rumours of a potential takeover and also ...
http://uk.reuters.com/article/oilRpt/idUKSYD25668820070927
"RAMS is planning $250 million in a residential mortgage backed securities offer as it tries to overcome its funding problems."
Westpac acquires RAMS franchise for $140m
October 2, 2007 - 9:23AM
http://www.smh.com.au/news/business/westpac-acquires-rams-franchise-for-140m/2007/10/02/1191091068157.html
Westpac Bank said it has reached agreement to acquire the RAMS Home Loans Group franchise distribution business for $140 million cash.
The business to be acquired includes the RAMS brand, franchise network and associated mortgage origination and servicing systems and contracts needed to run the distribution business.
Westpac is not acquiring the ASX listed RAMS Home Loans Group Ltd or its existing mortgage book.
"Acquiring this business extends our Australian distribution footprint and reach and dove-tails into Westpac's existing growth plans," Westpac's chief executive officer, David Morgan, said.
He said the acquisition will separate out RAMS franchise distribution business from its funding arm.
"The RAMS franchise model has proven to be successful and this transaction will allow it to continue," Mr Morgan said.
"This creates a sustainable future for franchisees and the RAMS brand.
"At the same time, the funding arrangements should provide support for the financing of RAMS existing mortgage book.
Westpac will provide up to $2 billion of financing to fund new business and to refinance a proportion of RAMS outstanding US XCP (extendible commercial paper) program at its expiry in the first quarter, 2008.
The sale of the brand and distribution business is subject to approval at a RAMS shareholder meeting planned for late November.
Westpac said the combination of funding and the agreement on the franchise distribution business for cash, made it attractive to RAMS shareholders.
"The RAMS franchise model has proven to be successful and this transaction will allow it to continue," Mr Morgan said.
RAMS, which listed in July, was a victim of the US sub-prime mortgage crisis that has afflicted global equity markets.
While the non-bank lender had no direct link to the troubled sub-prime sector, it revealed in August that exposure to volatile international credit markets would affect its financial performance in 2008.
It said last month that debt market turbulence could undermine its forecast $58.6 million net profit in fiscal 2008, compared to a 2006/07 pro-forma net profit of $43.5 million.
The 2007 result was up 49 per cent on the previous year and was consistent with prospectus forecast.
As a result of the transaction with Westpac, RAMS will remain a listed entity, continuing to service and amortise its existing loan book and all new business settled up to and including November 15, 2007.
RAMS chief executive officer Greg Kolivos will be retained by Westpac to oversee the transition, and said that existing staff would either move to Westpac with the sale or be retained by the company.
RAMS said that, apart from the change of name, there would be no changes for existing customers arising from the restructuring.