FlexiGroup has announced a strategic review of its commercial and leasing business after informal efforts were made to sell the business last year.
It comes as the group on Wednesday announced a $21.4 million net profit for the 2020 financial year and that it would raise $140m of equity.
The Australian’s DataRoom reported last year that FlexiGroup had opened a data room for a potential sale of its Australian and New Zealand commercial equipment leasing operations.
Scottish Pacific was earlier thought to be in exclusive talks to buy the assets, but it is understood that the parties could not agree on price.
Last year, analysts estimated that the division was worth about $280m.
But FlexiGroup was understood to have an asking price on the asset of about $300m.
On Wednesday, FlexiGroup said in its full year results that the business was now subject to a strategic review.
It had volume growth during the past financial year of 15 per cent, excluding the discontinued consumer leasing business.
FlexiGroup is known to be close to Citi, which is working on its equity raising at $1.14 per share to strengthen its balance sheet.
The raise is at a 12.6 per cent discount to the last closing price of $1.305.
It is by way of an accelerated non-renounceable entitlement offer, with $115m underwritten.
Share holders will receive 1 share for every 3.2 held.
Founder and chairman, Andrew Abercrombie, who is FlexiGroup’s largest shareholder with a 23 per cent stake, will participate in the entitlement offer, offering $7.5 million, or 22.7 per cent of his pro-rata entitlement.
Director John Wylie and backers, who holds about 5.2 per cent, will subscribe to 100 per cent of their entitlements.
It comes as the group announces a $21.4m net profit.
Sims could reap windfall from land sales
Some in the market believe that Sims needs to put some more thought towards selling more assets.
Bids due for BGC building materials empire
The contest is well under way for parties to buy the $800m BGC building materials business based in Perth.