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- Warren Buffett with a new acquisition, this time the Canadian Home Capital Group
Warren Buffett with a new acquisition, this time the Canadian Home Capital Group
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Loading...Warren Buffett’s Berkshire Hathaway Inc. has stepped in to inject funds into Home Capital Group Inc., the Canadian alternative lender attempting to rebound from near collapse after being accused by regulators of misleading investors.
Berkshire agreed to indirectly acquire C$400 million ($300 million) of the firm’s shares and provide a C$2 billion credit line to subsidiary Home Trust Company, Home Capital said late
Wednesday in Toronto. “Home Capital’s strong assets, its ability to originate and
underwrite well-performing mortgages, and its leading position in a growing market sector make this a very attractive investment,” Buffett said in the statement.
The move is the latest sign of a turnaround in the 30-year- old lender after a regulator in April accused it of misleading shareholders on mortgage fraud, which sent its shares tumbling,
sparked withdrawals and threatened to disrupt Canada’s real estate sector. Earlier this week, Home Capital agreed to sell a clutch of commercial mortgages to affiliates of KingSett Capital Inc. for C$1.16 billion in cash.
Buffett’s firm is investing through unit Columbia Insurance Company and will get a 38.4 percent stake. The average price per share will be about C$10, compared with yesterday’s closing price of $14.94. The investment “is a strong vote of confidence,” Brenda Eprile, Home Capital’s chairwoman, said in the statement.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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