Mutual Finance changes hands as Bublitz pops up again

Bublitz, who got out of Strategic after it was sold to Allco, cropped up last year when his involvement in related party loans to Viaduct Capital shareholder Phoenix Finance Holdings fell foul of the Treasury and cost the lender coverage under the government's retail deposit guarantee. Since then, he has reemerged to front Mutual Finance in a deal that will see him assume 100% ownership in October.

Mutual Finance launched a prospectus to raise some $4 million in March, and has turned its business around with a full-year profit likely after it posted a $126,000 loss in the 12 months ended March 31, 2009 after it cut its provisioning for bad loans in the eight months ended November last year.

The company was exempted from requiring a credit rating with its assets of $4.2 million coming in below the $20 million cap.

Lindsay Kincaid, the last of the company's old owners, stepped down from the board last week after Bublitz's shell company Argus Capital boosted its holdings to 80% in March.

In its March prospectus, independent chairman Paul Hocking indicated the company is in a position to grow from its "relatively small base" and said it will operate in the same manner as it did under its previous owners.

As at November 30, property finance made up about 79% of the finance company's total lending, with business lending at 11% and consumer finance at 9%. Still, only some $2.1 million worth of its loans on property were secured by a first mortgage.  

Hayes Knight Audit, the company's auditor, flagged a fundamental uncertainty about the company's ability to meet its "loan repayment obligations" and questioned whether its provisioning for impairment losses would cover its actual losses. It also flagged the expiry of the government's original retail deposit guarantee in October as a threat to Mutual Finance's liquidity.

Mutual Finance's Bublitz did not return depositrates.co.nz's phone calls.

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