Another problem for the ANZ bank, or a problem loan resolved? Bell Financial Group has agreed to takeover Tricom Group according to a statement issued this morning. The deal is subject to a number of conditions including a satisfactory outcome to due diligence before 7 March.
Bell didn’t release any price but some brokers say it could pay a nominal $1 for the Tricom brokerage and margin lending business which caused a panic when it delayed settlements at the ASX last month. Colin Bell bought the old John Taylor business several years ago for $1 and there’s speculation he’s done the same again.
The ANZ was the major funder of Tricom and put people into the business (as did the ASX) to work on cutting the size of the margin debt. At last report from Tricom it was around $780 million and falling.
Tricom was forced to rapidly downsize its margin lending business after facing problems with its own bankers, who cut off money when the margin lending book blew out to more than $2 billion last month.
Bell Financial said it would acquire 100% of Tricom Group with a capital infusion into the broker – assuming the due diligence is completed. Bell said an “earn out mechanism would be in place for existing Tricom shareholders, assuming the company meets certain performance targets”.
That would lower the immediate purchase price for Bell.