General Finance to join stock market

Non-bank lender General Finance and sister company Investment Research Group are set to join the stock market after agreeing a deal with a listed shell company.

Tuesday, May 29th 2018, 7:38AM

by Dan Dunkley

The companies, which make up the Corporate Holdings group, have agreed a $6.1 million deal with Mycko, an NZX-listed shell company.

Mycko was originally set up by Malaysian investors to buy the internet company Mykris in September 2015. It has remained on the market since the 2015 deal, waiting for a company to reverse into it in a so-called "backdoor listing". Backdoor listings are viewed as a lower risk and quicker way for companies to join the stock market.

Mycko will issue 103.4 million shares to fund the transaction, but the deal will see the owners of Corporate Holdings take control. Corporate Holdings is owned by Malaysian Rewi Bugo and Kiwi financier Brent King. The two investors and fellow backers orchestrated the takeover of General Finance and its sister company from entrepreneurs James Lockie and William Cairns in December. The deal is structured as 16.27 Mycko shares for every Corporate Holdings share.

General Finance launched in 1999 and became a prominent player in the non-bank space until the financial crisis, when it sold its portfolio of prime assets. It is aiming to ramp up lending following the new deal. The deal requires shareholder approval and Mycko hopes to have a decision next month.

King's involvement is the financier's first major venture since he exited finance company Dorchester Pacific in 2006. King built Dorchester into a $480 million company before it eventually collapsed after an ill-fated sale to Bridgecorp Capital.

King pitched the Mycko deal as an opportunity for investors to tap into the non-bank lending market. He has previously outlined plans for General Finance to grow in the medium term financing market, 1-3 year terms.

Tags: foreign investment Forsyth Barr NZX