Latitude Financial Services considers fresh tilt at listing in 2021

Latitude chief executive Ahmed Fahour. Picture: Aaron Francis

Further corporate activity appears to be ramping up in the financial services space, with talk in the market that non-bank lender Latitude Financial Services may renew listing efforts in 2021.

A compliance listing on the Australian Securities Exchange is one where an applicant that is privately owned or already listed in another country lists and quotes its existing securities without making a public offer.

This would enable shareholders, which include Kohlberg Kravis Roberts, Varde Partners and Deutsche Bank, to sell down their interests in the business gradually should they wish to do so.

The understanding is that a listing would not be imminent, as no decision has yet been made to move forward.

However, there is increasing talk in the market that such a move could soon be on the cards.

DataRoom understands investment bankers at Credit Suisse have been making calls around the market to test appetite for a float after the Ahmed Fahour-led Latitude considered an initial public offering twice before.

Credit Suisse took industry rival Liberty Financial to the boards in December with only a limited raising and the company has performed strongly since.

Liberty did well because it came to the market at a time when investors were hungry for high-yielding investments amid a low interest rate environment and kept its raising tight at just $321m, with its market value at $1.8bn. Liberty’s market value is now $2.45bn.

Last time Latitude tried to float, it had hopes to sell the business with a market value of about $3.6bn, equating to 11 times its annual net profit, which at the time was $287.6m.

The company is made up of the assets of the former local GE Capital consumer business, which was acquired by KKR, Varde and Deutsche in 2015 for a price of $8.2bn including debt.

The business, which refinanced $5bn of receivables last year through Bank of America and Deutsche Bank, offers consumer finance personal loans, credit cards, car loans and retail finance.